Parties

• Surety bond agreements always involve three parties: the surety who issues the bond, the applicant who applies for the bond and the beneficiary who is protected by the bond.
  
  

Regulations

• The surety company must comply with both state and federal laws that regulate the various types of surety bond agreements, such as the requirements for a property broker surety bond set by the Federal Motor Carrier Safety Administration.
  
  

Qualified Applicant

• The bond applicant must meet the criteria for issuance of the bond set by the surety company, which in all cases will include the applicant's good financial condition and business reputation.
  
  

Applicant Indemnity

• A surety bond agreement will always include a provision that requires the applicant to indemnify the surety, in the event the applicant does not perform his obligation and the surety has to pay out on the bond.
  
  

Bond Premium

• A surety bond agreement requires payment of a premium prior to issuance of the bond. Pricing methods vary, but most surety bond agreements require a payment of 0.5 to 2 percent of the total contract amount the surety is guaranteeing.