A fourth party to a bond is called a:

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Prepare for the Florida Claims Adjuster (6-20) Test. Use flashcards and multiple choice questions, with hints and explanations for each question. Ace your exam!

Multiple Choice

A fourth party to a bond is called a:

Explanation:
A bond normally involves three players: the principal (the one who promises to perform), the obligee (the party requiring the performance), and the surety (the entity backing the principal’s obligation). A fourth party comes into play when someone signs an indemnity agreement to reimburse the surety for losses the surety pays on the principal’s behalf. That person is the indemnitor. In other words, the indemnitor agrees to cover the surety’s costs if the principal fails to fulfill the obligation and a claim is paid. The indemnitor is distinct from the three standard parties—the surety, the principal, and the obligee.

A bond normally involves three players: the principal (the one who promises to perform), the obligee (the party requiring the performance), and the surety (the entity backing the principal’s obligation). A fourth party comes into play when someone signs an indemnity agreement to reimburse the surety for losses the surety pays on the principal’s behalf. That person is the indemnitor. In other words, the indemnitor agrees to cover the surety’s costs if the principal fails to fulfill the obligation and a claim is paid. The indemnitor is distinct from the three standard parties—the surety, the principal, and the obligee.

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