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Surety bonds are assumed to carry zero risk for the surety company, outlining the agreement between the principal, surety company, and obligee. The bond does not include language on the principal's reimbursement, so how do surety companies issue bonds with no loss? Indemnity agreements transfer risk from one party to another in surety bonds, with the indemnitor (principal) assuming risk and the indemnity (surety company) being absolved of liability.
