Question

As a requirement for getting his California adjuster license, Danny is required to submit proof of bonding with his application. He purchases a surety bond from PBJ Bonds. In this contract, Danny is considered the:

Option 1: Obligee
Option 2: Principal
Option 3: Surety
Option 4: Indemnitor

Answer 1

Danny is considered the Principal in the 3)surety bond contract he purchases from PBJ Bonds for his California adjuster license. The bond involves three parties: the principal (Danny).

Step-by-step explanation:

In the context of a surety bond that Danny purchases from PBJ Bonds, Danny is considered the Principal. A surety bond is a contract among three parties—the obligee, the principal, and the surety.

The principal is the individual or business that purchases the bond to guarantee future work performance or compliance with laws. The obligee is the entity requiring the bond, typically a government agency that seeks to protect public interest.

The surety is the insurance company or bonding agency that underwrites the bond, promising to cover any financial losses should the principal fail to meet their obligations.

Lastly, an indemnitor is someone who provides indemnity, or security, against a potential loss for the surety. In this scenario, Danny provides a guarantee through the purchase of the bond that.

He will perform his duties as an adjuster adequately. The state of California, which requires the bond, is the obligee, while PBJ Bonds acts as the surety.