A surety bond is not your typical form of insurance.
The main difference to the principal is that the principal will not be paid in anyway if their obligations are not met. A third party (the obligee) is compensated in the event of a claim.
With insurance a loss is expected by the insurance company. There is no loss expected when a surety guarantees a bond. In fact, if you do have a claim you can kiss your chances of obtaining a bond goodbye. In the current bond market, even high risk bond markets will deny you with previous claims.
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