Bond, Surety
Bond, Surety, a guarantee of the performance of an obligation. It protects a person against loss when another person fails to perform something he agreed to do.
There are many forms of surety bonds. A construction bond is one example. When builders sign a contract to construct a building, they agree to abide by the specifications in the contract. To guard against a failure to do so, the owner may require the builders to furnish a bond. The bond is issued, for a fee, by a bonding or casualty insurance company. If the contractor does not perform satisfactorily, the bonding company makes good the loss.
Another example of a surety bond is the bail bond.
Similar to the surety bond is the fidelity bond. The surety bond guarantees against loss through failure of performance; the fidelity bond guarantees against loss through dishonesty. Cashiers and others who handle money usually are bonded to protect their employers from loss.