What is the main function of a Surety in a bond?

The primary function of a surety in a bond is to guarantee the performance of the principal's obligations. In a surety bond, the surety company provides a financial guarantee that a principal will adhere to the terms of a contract or fulfill a duty, such as completing a construction project or complying with regulatory requirements. If the principal fails to meet these obligations, the surety is obligated to cover any losses or damages incurred by the party being protected by the bond.

This role ensures that the parties involved can trust the principal to perform their duties, as they have the backing of the surety. It is important to note that while the surety does provide some level of protection, its main function is to ensure performance and compliance rather than to protect the principal itself or simply evaluate risks associated with the principal.