A Surety bond is a contract among three parties: the obligee – the party who is the recipient of an obligation. The principal- the primary party who will perform the contractual obligation. The surety- who assures the obligee that the principal can perform the task.
There are four types of surety bonds:
Any Federal construction contract valued at $150,000 or more requires a bond when bidding or as a condition of contract award. Private entities, service contracts and supply contracts may also require surety bonds.
Fidelity bonds are a form of insurance protection that covers policyholders for losses that incur as the result of fraudulent acts or misconduct by specific individuals, usually employees.
There are three types of Fidelity Bonds:
Your business may be required by law to have a fidelity bond if you have a defined benefit plan.
Any business with employees, contractors or those with a high turnover rate.