Surety education
A surety bond is not a policy that protects your business from loss. It is a guarantee to an obligee—or the public—that you will meet defined obligations.
Article
Insurance is typically between you and a carrier. A surety bond involves the principal (your business), the obligee (the agency or party requiring the bond), and the surety (the company backing the bond). The bond is written for the obligee’s benefit.
If the surety pays a valid claim under the bond, you generally must reimburse the surety under an indemnity agreement. That is a core difference from most insurance claims.
License and permit bonds support regulatory compliance. Contract bonds support project obligations. Neither replaces general liability, workers compensation, or other insurance your contracts may require.
Last verified 2026-08-05. Universal surety concepts—not state-specific licensing rules.
Have a Texas agency notice and need help matching it to the right bond guide? Our surety team can help.
Talk to the pro →
