Surety Bond
Contract by which one party agrees to make good the default or debt of another. Actually, three parties are involved: the principal, who has primary responsibility to perform the obligation (after which the bond becomes void); the surety, the individual with the secondary responsibility of performing the obligation if the principal fails to perform. (After the surety performs, recourse is against the principal for reimbursement of expenses incurred by the surety in the performance of the obligation, known as surety's right of exoneration); and the obligee, to whom the right of performance (obligation) is owed.
Popular Insurance Terms
Transaction in which the ceding company pays a premium and is guaranteed certain future payments to fund future losses. If losses are less than was expected, the ceding company receives a ...
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Government reinsurance program that provided coverage for U.S. properties during World War II. Private insurers shared the first layer of coverage, with the government providing ...
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