What Does Surety Mean?
A surety is the person or organization that undertakes the responsibility of repaying a debt in case the debtor defaults or is unable to repay the debt. It is also known as a guarantor.
Insuranceopedia Explains Surety
The need for surety arises in contracts wherein one party has doubts about the ability of the other party to fulfill their obligations and other specified requirements. In this scenario, the first party typically seeks some kind of assurance, sometimes in the form of a surety to reduce risk. The guarantor enters a contract of suretyship, which could result in additional benefits, such as lower interest rates for the borrower.