Glossary of Surety Terms
additional Glossary of Terms is available.
- A person in custody whose release may be secured
by posting bail.
- A person or concern having possession of property
committed in trust from the owner.
- Bid Bond
- A guarantee that the contractor will enter into a
contract, if it is awarded to him, and furnish such contract bond (sometimes called
"performance bond") as is required by terms thereof.
- Court Bonds
- All bonds and undertakings required of litigants
to enable them to pursue certain remedies of the courts.
- Effective Date
- The date on which an insurance policy or bond
goes into effect, and from which protection is furnished.
- Fidelity Bond
- An obligation of the insurance company against
financial loss caused by the dishonest acts of employees.
- Judicial Bond
- A bond required in civil and criminal court
- Named Schedule
- A fidelity bond providing coverage for persons
listed or scheduled on the bond.
- Broadly, anyone in whose favor an obligation
runs. Frequently used in surety bonds, this refers to the person, firm or corporation
protected by the bond.
- Commonly called "principal," one bound
by an obligation. Under a bond, strictly speaking, both the principal and the surety are
- Power of Attorney
- Authority given one person or corporation to act
for and obligate another, to the extent laid down in the instrument creating the power.
- A person or organization whose obligation are
guaranteed by a bond.
- An arrangement whereby one party becomes
answerable to a third party for the acts of a second party. Customarily an insurance
company, the party in a suretyship arrangement who holds himself responsible to one person
for the acts of another.
- Surety Bond
- a bond which the surety agrees to answer to the
obligee for the non-performance of the principal (also known as the obligor).
- Stated in its simplest terms, suretyship embraces
all forms of obligation to pay debts or answer for the default of another.
This is a list of terms
provided by the California Department of Insurance. It is not meant to be all inclusive,
but should help with your understanding of the surety and bond documents.