Hawaii Insurance License Practice Exam

Question: 1 / 400

Who is the principal party in a bond that is responsible for performing the work?

Obligee

Surety

Principal

The principal party in a bond, specifically in the context of surety bonds, is the individual or entity responsible for fulfilling the contractual obligations associated with the bond. This includes completing the work or project as outlined in the agreement.

In a surety bond arrangement, the principal is typically a contractor or service provider who engages in a project requiring a bond to guarantee performance. If the principal fails to meet their obligations, the surety company (which backs the bond) may step in to fulfill the terms of the contract or compensate the obligee (the party requiring the bond) for any losses incurred.

Understanding the roles in a bond is crucial for anyone involved in contracts and insurance, as it clarifies responsibilities and ensures that all parties understand who will take the lead in executing the work.

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Guarantor

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