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Surety bonds are assumed to carry zero risk for the surety company. The bond outlines an agreement between the principal, surety company, and obligee. If a claim is filed, the surety will pay out. However, the bond form usually doesn't mention reimbursement to the surety. This is where an indemnity agreement comes in, transferring risk from one party to another. In a surety bond indemnity agreement, the principal assumes the risk while the surety company is absolved of liability.