A Surety Bond is an agreement subject to the Bond Form. The Bond is usually required for monetary compensation for failure to perform specified acts referenced in the Bond Form. A Surety Bond is a generic name for all bonds. There are three parts of a Surety Bond, the first is the Obligee. They are the entity requiring the Bond. Second is the principal. The Principal is the person whom will perform the contractual obligations set forth in the Bond Form. The third part is the Surety Company. They are the entity who will be insuring the principal of the obligations referenced in the Bond Form. Most Surety bonds require some form of financial guarantee or collateral between you and the Surety. It may be in the form of a passbook or a letter of credit. The letter of credit may also come with the requirement to pledge your corporate and personal assets to the bank in exchange for the bond issuance. Surety bonding is very different from typical property/casualty underwriting.. Your balance sheet, income statement, and credit worthiness are paramount.