The main types of bail security are cash bonds, surety bonds, property bonds, unsecured or recognizance bonds, and deposit or percentage bonds, although available options vary by jurisdiction. Federal criminal cases and immigration detention use separate federal release systems with their own rules.
A judge sets the release conditions, but the mechanism used to satisfy them depends on the defendant's finances, the charge, and the jurisdiction's rules. Some courts allow only a subset of these options, and some defendants may not be eligible for any financial release at all.
The sections below define each bond type on its own terms, then explain what actually distinguishes them: what secures the release, who bears the financial risk, and what happens if the defendant fails to appear.
What Are the Types of Bail Bonds?
The main types of bail security are cash bonds, surety bonds, property bonds, unsecured or recognizance bonds, and deposit or percentage bonds, although available options vary by jurisdiction. Federal criminal cases and immigration detention use separate federal release systems with their own rules.
Bail and bond are related but not identical terms. Bail generally refers to the conditions a court imposes for a defendant's pretrial release. A bond is a financial obligation or promise used to secure compliance with those conditions. Depending on the jurisdiction, a defendant may obtain release by depositing cash, executing a secured or unsecured bond, pledging property, using a commercial surety, or being released on personal recognizance.
Citation release and release on recognizance are often included in lists of bail bond types, but neither necessarily involves a commercial bail bond. A citation releases a person with instructions to appear in court. A recognizance release generally relies on the defendant's written promise to appear without requiring an upfront cash deposit.
State law determines which release methods are available. A judge applies the governing statutes and court rules when setting or modifying release conditions and may consider factors such as the alleged offense, criminal history, prior failures to appear, ties to the community, flight risk, and public-safety concerns. Some defendants may also be detained without a financial release option when applicable law permits or requires detention.
Commercial surety bail is a form of suretyship. The defendant is the principal, the government or court is the obligee, and the surety guarantees the financial obligation created by the bond. A bail agent commonly acts on behalf of the surety company that underwrites the bond.
What Is a Cash Bail Bond?
A cash bond secures a defendant's release by requiring the full amount ordered by the court to be deposited without using a commercial bail surety. The defendant or another person may generally post the required funds, subject to the court's accepted payment methods and local rules.
Cash bail requires the depositor to provide the required amount upfront. For example, a court requiring a $10,000 cash bond generally requires a $10,000 deposit rather than the smaller premium associated with a commercial surety bond.
The court holds the deposited funds while the bond remains in effect. When the case ends or the bond is otherwise discharged, the money is generally returned to the person legally entitled to receive it. Courts may deduct fines, fees, costs, assessments, or other amounts when applicable law authorizes those deductions.
If the defendant fails to appear or violates an enforceable condition of the bond, the court may begin forfeiture proceedings. The consequences and procedures vary by jurisdiction and may include forfeiture of the deposited money and issuance of an arrest warrant.
Cash bail eliminates the non-refundable commercial premium associated with a surety bond. Its primary disadvantage is liquidity: the depositor may have thousands of dollars tied up until the court exonerates or discharges the bond.
What Is a Surety Bail Bond?
A surety bail bond is a financial guarantee in which a surety promises the court that the bond obligation will be satisfied if the defendant fails to comply with the conditions secured by the bond. A licensed bail agent commonly arranges the bond for a non-refundable premium where commercial bail is permitted.
The defendant or indemnitor enters an agreement with the bail agent, pays the required premium, and may have to provide collateral. The agent then executes or files the bond on behalf of a surety company according to state law and court requirements.
The surety bond guarantees the stated bond amount; it does not necessarily mean the bail agent deposits that entire amount in cash when the defendant is released. For example, a $20,000 surety bond creates a potential obligation up to the bond amount even though the customer normally pays only the applicable premium and provides any required collateral.
Premium rates are regulated differently across states. A 10% premium is common in some jurisdictions, but there is no universal nationwide rate of 10% to 20%. Some states regulate the permissible premium, some prohibit commercial bail bonding, and others use different pretrial-release systems.
The premium normally compensates the bail bond company for issuing the bond and is generally non-refundable once earned under applicable law. Collateral is different from the premium. Collateral secures the surety against potential loss and generally must be returned after the bond is exonerated and the secured obligations are satisfied, subject to the contract and governing law.
If the defendant fails to appear, the court may declare the bond forfeited. State law determines whether the surety receives a period in which to produce the defendant, obtain relief from forfeiture, or otherwise avoid final liability.
The historical authority of bail sureties to seize and surrender their principals is commonly associated with Taylor v. Taintor, 83 U.S. 366 (1872). Modern bail enforcement, however, is governed principally by current state statutes, licensing requirements, court decisions, and constitutional limits. The authority of bail agents and fugitive-recovery personnel therefore varies substantially by state.
What Is a Property Bail Bond?
A property bond secures a defendant's release by using qualifying real property as security for the bond obligation. The court evaluates the property and may place or require a lien or other security interest that can be enforced if the bond is forfeited.
Courts that permit property bonds generally require sufficient equity above mortgages, tax liens, judgment liens, and other encumbrances. Some jurisdictions require property value or equity substantially greater than the bond amount, but there is no universal rule requiring exactly 1.5 times the bail amount.
The property owner may have to provide a deed, title records, mortgage information, tax records, an appraisal or assessed valuation, and evidence of existing liens. Additional owners or spouses may also have to consent when they possess a legal interest in the property.
Property bonds can take longer to approve than cash or commercial surety bonds because the court must verify ownership, value, and available equity. The actual processing period depends on the jurisdiction, court procedures, property records, and complexity of the ownership interests rather than a universal one-to-two-week timetable.
When the court exonerates the bond, the security interest can be released according to local procedures. If the defendant violates the conditions secured by the bond and the court enters a final forfeiture, the pledged property may become subject to enforcement proceedings. The exact collection and foreclosure procedures depend on applicable state law.
What Is a Recognizance or Unsecured Bond?
A recognizance or unsecured bond allows a defendant to obtain pretrial release without depositing the full bond amount or purchasing a commercial surety bond upfront. The defendant instead promises to appear in court and comply with the conditions of release.
Release on personal recognizance, commonly called an OR or ROR release, may involve no financial obligation beyond the defendant's promise to comply. An unsecured appearance bond can differ because it specifies a dollar amount that may become payable if the defendant violates the bond conditions even though no money is deposited at release.
Courts determine eligibility under applicable state or federal law. Judges may consider the seriousness of the charge, prior court appearances, criminal history, community ties, employment, residence, flight risk, and public-safety factors.
Recognizance and unsecured bonds are important to a complete bail taxonomy because they demonstrate that a bond does not always require cash, property, or a commercial bail company.
What Is a Deposit or Percentage Bond?
A deposit or percentage bond allows a defendant to secure release by depositing a specified percentage of the total bond amount with the court instead of paying the entire amount. Availability and required percentages depend on the jurisdiction.
For example, a court system permitting a 10% deposit on a $10,000 bond could require a $1,000 deposit rather than the full $10,000. This arrangement differs from paying a 10% commercial surety premium because the deposit goes to the court and may be refundable, subject to authorized deductions and forfeiture rules.
If the defendant satisfies the bond conditions, the court generally returns the refundable portion according to local law. If the bond is forfeited, the defendant or other responsible party may become liable for additional amounts up to the full bond obligation.
Deposit bonds are not available in every jurisdiction, but they should be distinguished from commercial surety bonds because a percentage paid to the court and a premium paid to a bail agent create different legal and financial consequences.
What Is an Immigration Bail Bond?
An immigration bond secures compliance with specified release or immigration obligations for certain noncitizens in federal immigration proceedings. Immigration bonds operate under federal immigration law and are separate from bail imposed in state criminal cases.
One important form is an immigration delivery bond. A delivery bond allows an eligible detainee to remain outside immigration custody while proceedings continue, subject to the requirement that the individual appear when directed by immigration authorities.
A voluntary-departure bond serves a different purpose. It may secure compliance with an order permitting a noncitizen to depart the United States voluntarily within the period authorized by immigration law.
Bond eligibility and the authority to set or review a bond depend on the statutory basis for detention and the individual case. Under 8 U.S.C. § 1226(a), qualifying detainees may be released on bond or conditional parole. Other statutory provisions impose mandatory detention or otherwise restrict bond eligibility for specified categories of noncitizens.
An immigration judge may review bond custody determinations in cases within the immigration court's jurisdiction, but not every immigration detainee is legally entitled to a bond hearing or release on payment of a bond.
Immigration bonds should therefore be treated as a separate federal category rather than simply another type of state commercial bail bond. The posting procedure, eligibility requirements, payment system, cancellation rules, and refund procedures are governed by federal immigration law and Department of Homeland Security procedures.
What Is a Federal Bail Bond?
Federal pretrial release is governed primarily by the Bail Reform Act, 18 U.S.C. §§ 3141-3156, which requires federal courts to determine whether a defendant should be released, released subject to conditions, or detained before trial. The federal system differs substantially from the commercial bail model used in some states.
Under 18 U.S.C. § 3142, a federal judicial officer generally must use the least restrictive condition or combination of conditions that will reasonably assure the defendant's appearance and the safety of other people and the community.
Federal release conditions can include travel restrictions, reporting requirements, restrictions on firearms, employment requirements, third-party custodians, location monitoring, restrictions on contact with specified people, and financial conditions when authorized.
Federal law also permits pretrial detention after the required procedures when no condition or combination of conditions will reasonably assure appearance and community safety. The Bail Reform Act identifies circumstances in which the government may seek a detention hearing and circumstances that create rebuttable presumptions affecting the detention analysis.
Financial security can still play a role in federal cases. Under 18 U.S.C. § 3142(c), a court may require execution of an appearance bond, deposits of money or property, solvent sureties, or other conditions authorized by the statute. Federal law also states that a judicial officer may not impose a financial condition that results in a defendant's pretrial detention.
Commercial bail bonds are therefore not the defining feature of federal pretrial release. Federal courts commonly rely on release conditions, unsecured or secured appearance bonds, property, third-party custodians, and pretrial-services supervision rather than the conventional state commercial bail-bond model.
If a defendant breaches a bond condition, Federal Rule of Criminal Procedure 46 governs forfeiture of the bail. The court must declare the bail forfeited when a condition of the bond is breached, although the rule also provides procedures for setting aside or remitting forfeiture in appropriate circumstances.
Knowingly failing to appear as required can also constitute the separate federal offense of failure to appear under 18 U.S.C. § 3146. The potential punishment depends on the circumstances and the underlying offense. Federal sentencing consequences should be calculated under the statutes and Sentencing Guidelines applicable to the individual case rather than described as an automatic 25% sentence increase.
What Is the Main Difference Between the Types of Bail Bonds?
The main difference between bail bond types is what secures the defendant's release and who assumes the financial risk. Cash bonds use deposited money, surety bonds use a third-party surety, property bonds use real estate, unsecured bonds rely on a promise backed by potential liability, and deposit bonds require only part of the stated amount upfront.
Federal criminal release and immigration bonds require separate treatment because they operate under federal statutes rather than state bail law. Citation and recognizance releases also differ from secured bail because they may permit release without depositing money, pledging property, or purchasing a commercial surety bond.
The exact options, costs, collateral requirements, refund rules, forfeiture procedures, and eligibility standards depend on the jurisdiction and the court order in the individual case.
How Much Does Each Type of Bail Bond Cost?
The cost of a bail bond depends on how the bond is secured: cash bonds generally require the full amount upfront, surety bonds require a regulated non-refundable premium, property bonds can create appraisal and filing costs, and deposit bonds require a percentage of the total bond. Exact costs vary by jurisdiction and court order.
The amount of bail and the cost of obtaining release are not necessarily the same. A judge might set a $20,000 bond, for example, while the amount that must be paid immediately could range from the entire $20,000 to a percentage of that amount depending on the type of bond authorized.
A cash bond generally requires the full amount ordered by the court. Posting a $20,000 cash bond would therefore ordinarily require a $20,000 deposit. The money may be returned after the bond is discharged, although courts can make deductions when authorized by applicable law.
A commercial surety bond generally requires a non-refundable premium rather than payment of the entire bond amount by the customer. Premium rates vary by state because commercial bail is regulated at the state level. A 10% premium is common in some jurisdictions, but 10% to 20% should not be treated as a nationwide rule.
For example, a 10% premium on a $20,000 surety bond would cost $2,000. That $2,000 premium is generally the price charged for issuing the bond rather than a refundable deposit. The bail agent may also require collateral depending on the bond amount, defendant, indemnitor, and applicable law.
A property bond generally does not require the owner to pay the full bail amount in cash. Instead, qualifying equity in real property secures the obligation. The owner may incur appraisal, title-search, lien-recording, document, or other court-related costs depending on local requirements.
An unsecured or recognizance bond can require little or no upfront payment because the defendant is released without depositing the full stated bond amount. An unsecured bond can still create financial liability if the defendant fails to comply with the conditions secured by the bond.
A deposit or percentage bond requires only part of the stated bond amount upfront. If a jurisdiction permits a 10% deposit bond, for example, a $20,000 bond would require a $2,000 court deposit. Unlike a commercial surety premium, some or all of that court deposit may be refundable after the bond is discharged, subject to applicable deductions and forfeiture rules.
Federal criminal cases do not have a single standard federal bail bond cost. A federal court can impose an unsecured appearance bond, require money or property as security, require solvent sureties, or impose nonfinancial release conditions under the Bail Reform Act. The financial obligation therefore depends on the conditions ordered in the individual case.
Immigration bond costs likewise depend on the type and amount of bond required under federal immigration law. The bond amount should be distinguished from any separate fee or premium charged by a company that provides financing or surety services.
| Bond type | Typical upfront financial requirement | Usually refundable? |
|---|---|---|
| Cash bond | Full amount ordered | Generally, after discharge, subject to authorized deductions |
| Surety bond | Regulated premium plus possible collateral | Premium generally is not refundable; collateral is treated separately |
| Property bond | Qualifying property equity plus possible appraisal, filing, or recording costs | Property remains with owner unless enforcement follows forfeiture |
| Recognizance bond | Usually no upfront security | No deposit to refund when none is required |
| Unsecured bond | Usually no upfront deposit | No deposit to refund when none is required |
| Deposit/percentage bond | Court-ordered percentage of total bond | Generally refundable subject to applicable deductions and forfeiture rules |
| Federal release bond | Depends on conditions ordered by federal court | Depends on form of security |
| Immigration bond | Bond amount set under applicable federal procedures | Depends on bond type, compliance, cancellation, and federal procedures |
The key distinction is between cost and security. A non-refundable premium is a cost of obtaining a commercial surety bond. Cash, property, or other collateral generally secures an obligation and can be returned or released when the bond is properly discharged, subject to applicable law.
How Do Cash and Surety Bail Bonds Compare?
Cash and surety bail bonds differ mainly in who provides the financial security, how much money must be provided upfront, and whether that payment is refundable. A cash bond generally requires the full court-ordered amount as a deposit, while a surety bond uses a third-party surety in exchange for a generally non-refundable premium.
| Factor | Cash bail bond | Surety bail bond |
|---|---|---|
| Amount secured | Full bond amount | Full bond amount guaranteed by surety |
| Upfront payment | Generally full amount | Premium set under applicable state law |
| Payment goes to | Court or authorized government office | Bail agent or surety |
| Refundable payment | Generally yes, subject to deductions and forfeiture | Premium generally no |
| Collateral | Usually unnecessary beyond cash deposited | May be required |
| Third-party surety | No | Yes |
| Commercial bail agent | No | Usually yes |
| Financial risk | Deposited cash can be forfeited | Surety faces bond liability; indemnitor may face reimbursement or collateral loss |
| Availability | Depends on court order and jurisdiction | Only where commercial surety bail is permitted |
| Main advantage | Avoids non-refundable surety premium | Reduces cash required immediately |
| Main disadvantage | Requires substantial cash upfront | Premium is generally a sunk cost |
A cash bond requires the depositor to provide the amount required by the court. If bail is set as a $25,000 cash bond, posting it generally requires depositing $25,000 rather than paying a percentage to a commercial bail company.
The principal advantage is that the deposited money generally remains recoverable. Once the court discharges the bond, the person legally entitled to the funds can generally receive the deposit back, subject to any deductions authorized by law. If the bond is forfeited, however, some or all of the deposited money can be lost.
A surety bond shifts the immediate funding requirement from the defendant or family to a third-party surety. Instead of depositing the entire $25,000, the customer pays the bail agent the premium permitted under applicable state law. If the applicable premium were 10%, a $25,000 bond would produce a $2,500 premium.
That premium generally is not returned when the case ends because it pays for the surety service. This distinguishes the premium from collateral. A bail agent may separately require cash, real estate, vehicles, securities, or other qualifying assets as collateral against the surety's potential loss. Collateral is generally released after the bond is exonerated and the secured obligations are satisfied, subject to the agreement and applicable law.
The financial consequences also differ when the defendant fails to appear. With a cash bond, the deposited money is directly exposed to forfeiture. With a surety bond, the surety can become liable for the forfeited bond amount and may seek reimbursement from an indemnitor or enforce collateral according to the bail agreement and governing law.
Neither option is universally cheaper. A cash bond requires more liquidity but can allow the depositor to recover the money. A surety bond requires less cash upfront but creates a non-refundable premium expense. For example, successfully completing a case secured by a $20,000 cash bond could return most or all of the $20,000 deposit, while a $2,000 surety premium based on a hypothetical 10% rate would generally remain a $2,000 cost.
The better comparison is therefore liquidity versus non-refundable cost. Cash bail requires more money upfront but can preserve that money if the bond is discharged without forfeiture. A surety bond reduces the immediate cash requirement but charges a premium for transferring the bond obligation to a commercial surety.
Do Bail Bond Laws Vary by State for These Bond Types?
Yes. Bail bond laws vary by state because each jurisdiction determines which bond types courts may accept, how commercial bail agents operate, what premiums they may charge, and what procedures govern forfeiture and exoneration. Some states permit commercial surety bail, while others restrict or prohibit it.
State law can affect nearly every part of the bail process, including whether a defendant can use cash, property, a commercial surety, or a percentage deposit to secure release. State statutes and court rules can also determine licensing requirements for bail agents, permissible premiums and fees, collateral practices, forfeiture deadlines, and the procedures for surrendering or recovering a defendant.
Even within a state, procedures can differ among courts and counties. Local courts may have different administrative requirements for accepting property, processing deposits, documenting sureties, or approving particular forms of security, provided those procedures comply with controlling state law.
For that reason, a bond type available in one jurisdiction should not be assumed to be available under the same terms elsewhere.
- Commercial surety bonds: Some states permit licensed commercial bail agents, while others have abolished or substantially restricted commercial bail bonding.
- Cash bonds: Courts may require the full amount or permit other forms of financial security depending on state law and the release order.
- Deposit or percentage bonds: Some jurisdictions allow defendants to deposit a percentage of the stated bond directly with the court rather than purchase a commercial surety bond.
- Property bonds: Availability, required equity, acceptable property, valuation methods, and documentation vary by jurisdiction.
- Recognizance and unsecured bonds: Eligibility and financial consequences depend on the governing pretrial-release statutes and court order.
- Bail-agent premiums: States that permit commercial bail can regulate the rates, fees, financing arrangements, and disclosures bail agents may use.
- Bond forfeiture: States establish different deadlines and procedures for declaring forfeiture, providing notice, producing a defendant, entering judgment, and granting remission or relief from forfeiture.
- Bail enforcement: Licensing and authority for bail agents, bail enforcement agents, and fugitive-recovery personnel differ significantly among states.
Federal criminal release is different because it is governed primarily by federal law, including the Bail Reform Act. Immigration detention and immigration bonds also operate under federal immigration law rather than individual state bail statutes.
The controlling jurisdiction therefore matters as much as the bond type. A cash, surety, property, or deposit bond can carry different requirements and consequences depending on the state and court handling the case.
What Documentation Does a Property Bail Bond Require?
A property bail bond generally requires documents proving ownership, current property value, available equity, and existing liens or encumbrances before a court will accept real estate as security. Exact documents and minimum equity requirements vary by jurisdiction.
The court must determine that the person offering the property has a valid ownership interest and that enough unencumbered equity exists to secure the bond. As a result, property bonds typically require more documentation and verification than cash bonds.
Common documentation can include:
- Deed or other proof of ownership: Establishes who legally owns the property offered as security.
- Property valuation: A tax assessment, appraisal, or other court-approved valuation establishes the property's current or accepted value.
- Mortgage information: A current mortgage statement or payoff statement establishes how much secured debt remains against the property.
- Lien or title information: A title search, ownership-and-encumbrance report, or similar record identifies mortgages, tax liens, judgments, and other claims that reduce available equity.
- Property-tax records: Courts may require evidence of assessed value and confirmation that property taxes are current.
- Identification: Property owners may have to provide government-issued identification and execute documents required to pledge the property.
- Security documents: Depending on state and local procedure, the owner may have to execute a lien, deed of trust, mortgage, or other instrument giving the government a legally enforceable security interest.
Available equity is generally calculated by subtracting mortgages, liens, and other qualifying encumbrances from the property's accepted value. A property worth $300,000 with $180,000 in secured debt, for example, has approximately $120,000 in gross equity before accounting for any additional liens or adjustments required by the court.
Courts may require the available equity to exceed the amount of the bond. The required ratio varies by jurisdiction, so a 1.5-times equity requirement should be described as a rule used in particular jurisdictions rather than a nationwide property-bond standard.
Ownership can also affect the approval process. When property has multiple legal owners, the court may require each person whose ownership interest is necessary to encumber the property to consent to or execute the security documents. Whether every owner must personally appear at the courthouse depends on local law and procedure.
After the required documents are approved, the appropriate security instrument may need to be recorded in public land records. Recording establishes the government's security interest against the property while the bond remains in effect.
When the bond is exonerated, the property owner can obtain release of the lien or other security interest according to the applicable procedure. If the bond is finally forfeited, the government may pursue the remedies authorized by law against the pledged property.
Property-bond documentation therefore serves three primary purposes: prove ownership, establish sufficient equity, and create an enforceable security interest.
What Rights Does a Surety Have on a Bail Bond?
A bail bond surety can have rights to surrender or recover the defendant, protect or enforce collateral, seek relief from forfeiture, and recover covered losses from an indemnitor, but the scope of those rights depends on state law and the bail agreement. General suretyship doctrines can provide additional rights when applicable.
The first category involves the defendant. Where state law permits it, a bail surety may surrender the defendant back into custody and seek discharge from continuing liability on the bond. A surety may also use appropriately licensed or authorized bail-enforcement personnel to locate and apprehend a defendant who fails to appear.
Those recovery powers are not uniform nationwide. States regulate who may apprehend bail fugitives, what licenses or registrations are required, when a defendant may be surrendered, and what conduct recovery personnel may use. The historical discussion in Taylor v. Taintor, 83 U.S. 366 (1872), therefore does not create an unlimited modern nationwide power for bail agents or bounty hunters.
The second category involves collateral. A bail agent or surety may require collateral to protect against potential losses created by the bond. Depending on the agreement and applicable law, collateral can include cash, real estate, vehicles, securities, or other property.
Collateral should be distinguished from the bail premium. The premium compensates the bail business for issuing the bond and is generally non-refundable once earned according to applicable law. Collateral secures potential obligations and generally must be returned after the bond is exonerated and the secured obligations are satisfied.
A defendant's failure to appear does not necessarily mean the surety immediately becomes the unrestricted owner of pledged collateral. The surety's ability to apply, retain, sell, or otherwise enforce collateral depends on the indemnity agreement, the losses actually incurred, applicable statutes and regulations, and any required forfeiture or accounting procedures.
The third category involves bond forfeiture. If a defendant fails to appear, the court can initiate forfeiture proceedings. State law commonly establishes a period and procedure under which the surety may produce the defendant, establish a statutory defense, request that forfeiture be set aside, or seek remission before or after a final judgment.
A surety may also possess traditional rights recognized by suretyship law, although their application to a particular bail bond depends on the governing jurisdiction:
Exoneration allows a surety, in appropriate circumstances, to require the principal to perform an obligation for which the surety would otherwise become liable. The remedy is designed to prevent the surety from having to absorb a loss that should be satisfied by the principal.
Reimbursement, also called indemnification in some contexts, allows a surety that has paid a covered obligation to seek recovery from the principal or an indemnitor when the governing agreement and law create that liability.
Subrogation can allow a surety that satisfies an obligation to succeed to certain rights or remedies associated with the obligation it paid. The doctrine prevents the principal or another responsible party from receiving an unjust benefit merely because the surety satisfied the debt.
Contractual indemnity provides another important source of protection. Bail agreements commonly require one or more indemnitors to reimburse covered losses, expenses, or costs resulting from the bond. The precise obligations depend on the contract and applicable law.
For example, if a $50,000 surety bond is finally forfeited and the surety becomes legally obligated to pay $50,000 to the government, an enforceable indemnity agreement may permit the surety to seek reimbursement from the responsible indemnitor and apply qualifying collateral toward that loss. Recovery costs and other expenses may also be recoverable when the contract and applicable law permit them.
These rights explain why the financial structure of a surety bond involves more than its premium. The premium pays for issuance of the bond, collateral secures potential exposure, indemnity allocates responsibility for covered losses, and forfeiture law determines when the surety actually becomes liable to the government.