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Surety bonds are issued with zero risk assumed by the surety company. The bond outlines terms between principal, surety company, and obligee. Although the bond doesn't mention reimbursement, an indemnity agreement is key. An indemnity agreement is a two-party contract transferring risk from one party to another, with the indemnitor assuming risk and the indemnity being absolved of liability. This agreement allows surety companies to confidently issue bonds without expecting losses.
