# Surety Bonds 101 - Surety ~Versus~ Insurance

Source: https://a1suretybonds.com/learning-center/insurance-vs-surety

- *Insurance**

- Based on the theory of pooled risks

- No indemnification – loss is paid out and no recovery from the principal is required

- Premium is based upon an estimation of losses based on historical trend analysis for specific policy exposure.

- *Surety**

- Case by Case basis, no pooling of risk

- Premium is based on the theory of “NO LOSS”

- If underwriting is 100% efficient, premium is to cover cost of underwriting and execution of a bond, not to pay losses.

[The Obligee](https://a1suretybonds.com/learning-center/the-obligee)

[Types of Surety Bonds](https://a1suretybonds.com/learning-center/types-of-surety-bonds)

Surety Bonds 101 - Surety ~Versus~ Insurance

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A1 Surety Bonds (The Surety Syndicate, LLC), a nationwide surety bond agency · (800) 737-4880 · info@a1suretybonds.com · https://a1suretybonds.com
Requirements are set by each state or agency and can change; the obligee's current instructions and the law control.