A three-party undertaking in which a surety answers to an obligee for a principal’s performance of an obligation — completing works, paying suppliers, meeting a customs or licensing requirement. Distinguish it from an independent demand guarantee. A suretyship is accessory to the underlying obligation, so the surety’s liability tracks the principal’s and the obligee generally has to establish that default has occurred before it can recover; a demand guarantee pays against a compliant demand and argues later. The distinction is not always clear from the instrument’s title, so read the operative wording. Whether the product is regulated as insurance, as a banking product, or barely at all differs by market.
Why this entry carries no source list. This is a product category or an official document type rather than a defined term. What it covers or attests is set by the policy wording, the facility terms, or the requirements of the country demanding it — and those differ by insurer, by bank and by jurisdiction. Naming one provider’s brochure as the authority would dress a single firm’s practice as a general rule. Read the wording you are actually being offered.