SURETY BONDS (70) COMPREHENSIVE STUDY GUIDE 2026

SURETY BONDS (70) COMPREHENSIVE STUDY
GUIDE 2026

◉ How many parties to a bond?


A. one


B. two


C. three


D. four.
Answer: C. three


Feedback/Explanation:
Three parties to the bond (always) The 4th party to the bond is a
maybe, therefore not in the count


◉ Joe provided a bond to XYZ. Inc. Who is Joe?


A. Principal

,B. Oblige


C. Indemnity


D. Surety.
Answer: A. Principal


Feedback/Explanation:
Joe is the person who will perform, known as the principal.


◉ What is NOT a difference between insurance and bonds?


A. Bonds are recoverable - insurance is recoverable


B. Insurance has 2 parties
to contract - bonds have 3 parties


C. Insurance Agents sell the
contracts


D. Bonds may be activated

,by written contract - insurance is written or verbal.
Answer: C. Insurance Agents sell the contracts


◉ All are parties to bonds EXCEPT?


A. Principal


B. Oblige


C. Surety


D. Indemnitor.
Answer: D. Indemnitor


Feedback/Explanation:
ARE means always. Indemnitor is not always a party to the bond?


◉ If a Bid Bond is requested, how do we identify the person doing
the work?


A. Principal

, B. Surety


C. Obligee


D. Coinsurer.
Answer: A. Principal


◉ How long does an agent need to
keep client records?


A. 2 years


B. 3 years


C. 4 years


D. 5 years.
Answer: D. 5 years


Feedback/Explanation:
3 years for retaining accounting records and 5 years for retaining all
other client records