Surety bonds
Principal
The business whose performance a surety bond guarantees. The principal buys the bond and repays the surety for any valid claim it pays.
The principal is the party required to obtain a bond, typically the business or person seeking the license. The principal promises to perform, and the bond backs that promise.
As principal you ultimately stand behind the bond: if the surety pays a claim, you repay it under the indemnity agreement. That is why sound operations, not just a low premium, are the real goal in bonding.
Related terms
Where this comes up
Principal is one piece of getting and keeping a business licensed. We handle the filings, bonds, and renewals that surround it across every state where you operate.