Reduce the risk of financial loss – Guarantee performance and payment – Guaratee credibility of business people and making sure they follow the laws governing their field.
Suretyship is a contractual relationship whereby one party, a surety, agrees to answer for the debt, default, or miscarriage of another, a contractor.
Most surety business is simply about guaranteeing. In the old days, when you knew the cobbler next door, you knew that he would do a good job making a pair of shoes for you. In the event there was a problem you would go back and have him correct it.
As our cities grew, it became increasingly more difficult to go to the professional next door to get the job done. Since you no longer knew who was doing the job but still wanted some way to guarantee that the job would be performed correctly, a surety bond was supplied. If the job was not performed properly, the surety company would step in and hire someone else to finish that job.