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Surety bonds are assumed to carry zero risk for the surety company. The bond outlines the agreement between the principal, surety company, and obligee. There is no language in the bond form about the principal reimbursing the surety. The key to the surety company confidently issuing a bond is the indemnity agreement. This two-party contract transfers risk from the principal to the surety company. The indemnitor assumes the risk, while the surety company is absolved of liability.
