Collateral A surety company may occasionally request collateral to reduce the risk of the bond. Collateral is sometimes required for high risk principals or unusual obligations. There are many forms in which collateral may be provided, including cashiers checks, certificates of deposit or irrevocable letters of credit. In addition, collateral reduces the risk a surety company assumes when issuing a bond. After all obligations of the bond have been met, the obligee releases the surety company from their obligation under the bond and the collateral is returned to the principal.
A surety company may occasionally request collateral to reduce the risk of the bond. Collateral is sometimes required for high risk principals or unusual obligations. There are many forms in which collateral may be provided, including cashiers checks, certificates of deposit or irrevocable letters of credit. In addition, collateral reduces the risk a surety company assumes when issuing a bond. After all obligations of the bond have been met, the obligee releases the surety company from their obligation under the bond and the collateral is returned to the principal.
Toll Free Surety Bond Hotline© (877) 723-4224
