What is required to enforce a surety bond?

To enforce a surety bond, financial security from the principal is a crucial requirement. A surety bond acts as a protection mechanism for the obligee, ensuring that the principal will fulfill their obligations as stated in the bond. If the principal fails to meet these obligations, the surety (the bonding company) must provide compensation to the obligee.

The reason financial security is needed from the principal is that it serves as a form of guarantee that the principal can cover the cost of any claims made against the bond. This financial backing reflects the principal's ability to fulfill their contractual duties and protects the surety from potential financial loss when executing the bond terms.

While written agreements and approvals might be part of the bond issuance process, they do not necessarily ensure enforcement. Legal representation could play a role in disputes or claims, but the core requirement for enforcement hinges on the financial security provided by the principal, which ensures that there is a reliable means to cover any obligations or claims that arise in relation to the bond.