CAIB 3 - Chapter 5 - Surety Bonds Questions and Answers 100% Pass

What guarantees are provided by various licence and permit bonds? 1. Compliance Guarantees 2. Financial Guarantees 3. Credit Guarantees Surety -The state of being sure, certain and secure. -"one who undertakes to pay money or to do any other act in event that his (the) principal fails therein." -Promises to answer for the default of the principal. Suretyship A guarantee of performance made by one person or entity for another. It's basic function is to eliminate risk to the person to whom the promise of performance is made. Personal Suretyship A guarantee from family or friends to a third party of promise to fulfil some obligation. This practice of going bond or guaranteeing the performance of another marked the beginnings of suretyship