Bonds (Other than Bail) Overview
A bond is a contractual guarantee by a third-party that something will happen. There are two general categories of bonds - fidelity and surety.
A fidelity bond protects employers from employee theft by guaranteeing the employers money and property when an employee or someone entrusted by the company causes damage through careless or dishonest action. Typically, insurance companies and security firms are required to obtain a fidelity bond. Some types of fidelity bonds are blanket position bonds, named schedule bonds, financial institution bonds, etc.
A surety bond is a three party guarantee put into place to protect the party requesting the bond and guarantees the performance, ability, honesty and integrity of individuals performing various responsibilities and obligations. The three parties involved are the obligee, principal and surety. However, there can be another party to a suretyship called an indemnitor.
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