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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. The bond typically does not include language about the principal's reimbursement to the surety. An indemnity agreement is a contract used by surety companies to transfer risk from the principal to the surety company. The indemnitor assumes the risk, while the surety company is absolved of liability.