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Surety Bond St Augustine

by | Jun 16, 2020 | Surety Bonds | 0 comments

What exactly is a Surety Bond?

A Surety Bond, although purchased from an insurance agency such as The First Coast’s and the Florida Key’s Premier Boutique Independent Insurance Agency, Seaman’s Insurance Group is different than an insurance policy.  How so? You might ask.

Surety Bond is a contract between three parties.  Those three parties in the contract are comprised of terms that we don’t use in every day conversations.  They are: the Obligee, the Principal and the Surety.  They also involve an Indemnity Agreement that basically says that if the person that was required to buy the bond doesn’t live up to their part of the agreement with the party that required the bond that although the surety company (most people think of them as insurance companies) will pay out.  The catch here is that the party that was required to buy the bond will have to pay the Surety Company back.

I am sure you are thinking, “great, now exactly what do these terms mean?”

Well, lucky for you, the author of this blog post has spent years living and breathing Surety Bonds.  I promise not to get to deep into weeds with the ins and outs and in-betweens of what Surety Bonds are.  They say that the perfect blog post is only about 100 words long and I am already way over that point if you stop reading right here.  So instead of sharing all of my Surety Bond knowledge in one post, I will start a Surety Bond Blog Series.

In order to not leave you hanging here are the meanings of the terms mentioned above.  Some are easy to get confused and even how you pronounce one or two of them is up for debate… kind of like the word tomato.

Obligee: The recipient of obligation

Principal: The person, party or entity that will be performing the contractual obligation

Surety: The entity that assures the Obligee that the Principal can actually perform the task that they are being hired to do.

Another term that you may see or hear is the term Obligor.  An Obligor is referring to the Surety who, pays the Obligee if the Principal fails to perform as required by the contract.

I remember when I first started working in a global insurance company’s Surety  Subrogation/Recovery department.  Being a man that likes to make things as easy as possible to understand, I asked my manager this:  “My job in this department is to recover losses on Surety Bonds.  People purchased bonds in order to be able to get a contract that would enable them make money.  However if they could not perform or something went wrong and the job did not get done, or did not get done correctly, the bond issued by the insurance carrier will pay the party that required the bond.  Where does it say in the contract that we have the right to ask for our money back?”  My boss walked me into the file room, which is larger than my first apartment, pulled a random surety file flipped to a page that had the term Indemnity Agreement on it.  This was signed and notarized.  This form had some legalese on it that basically said that the Principal is responsible for paying the Surety back for its losses on the job.  I looked at my boss and said, “ok, great.  What if they refuse to pay us back or even talk to us?”  His response was, “well, if that ever happens, go ahead and hire an attorney or law firm and have them take care of that for you.”  There are entire law firms that make all of their money handling Surety losses for insurance companies.

Stay tuned for  more exciting information and shared experiences in the wonderful world of Surety Bonds!


Seaman’s Insurance Group is St Augustine’s Premier Insurance Agency, proudly serving the First Coast, Jacksonville, Ponte Vedra Beach, St Augustine, Palm Coast and beyond! Including all of the Florida Keys from Key West to Key Largo. We specialize in helping individuals, families, as well as businesses of all sizes with all facets of their life and operations.


Please submit a request for contact by filling out the form below if you are in need of a Surety Bond.


320 High Tide Dr
St Augustine FL 32080
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