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A surety bond is a financial instrument that protects against financial loss stemming from an adverse event that disrupts or prevents a contract from being completed. A surety bond company assumes the liability for the debt, default, or failure of the principal to the obligee. They are purchased by the principal to reassure the obligee that there is a safety net of sorts to complete a contract should the principal suddenly become incapable of living up to it.
https://www.nielsonbonds.com/infographic-key-highlights-of-bid-bonds/