A general term describing any bond which protects the obligee against direct loss which may arise as a result of failure on the part of a principal to perform.
A bond which promises to reimburse an Obligee for loss incurred when a Principal fails to perform its contract or (in some cases) fails to pay for material, services or labor used in prosecution of the contract.
Commonly another name for the bond. Bonds provide a form of indemnification of loss to the Obligee. The bond will provide compensation in case of a loss. The surety bond will respond up to the limits of liability (the bond penalty), but it will pay no more than the amount of the obligee's actual loss unless the bond is a forfeiture bond.