"Collateral" refers to assets or things a value that a surety company may accept as security for and in support of a surety bond. Acceptable collateral for surety companies are generally liquid (cash) or instruments that are easily redeemed for cash. The collateral protects the surety from loss if there is a breach, claim and/or loss under a bond or bonds. Sureties generally do NOT accept real property, tangible assets, UCC filings or any type of assignment or lien on assets. Appeal and supersedeas bonds, mechanic's lien release bonds and high risk financial guarantees are good examples of bond classes that require the support of collateral security however any principal whose financial condition and/or creditworthiness does not meet underwriting thresholds will often be offered terms that include collateral. The amount required depends on the nature of the obligation, the principal's financial position and the bond class loss history. These are acceptable types of collateral.

Release of Collateral Security

Pursuant to the surety bond and collateral agreement between the bond principal, surety and surety's managing general agency, collateral is released back to a principal only after evidence is received that the surety has been fully and irrevocably released from its obligation. The surety decides UNILATERALLY what constitutes "acceptable evidence" of the exoneration of a bond. Each bond class is released in a particular manner. Some examples:

Questions regarding collateral security? Contact an underwriter at (800) 373-2804, Underwriting@SuretyOne.com or here for a live chat.