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A number of these factors fall under what the Surety industry calls “The Three C's”; Character, Capacity, and Capital. All three of these are important to the underwriting process. The principal needs to exhibit the Character, Capacity, and Capital to qualify for surety credit.

First, write the name of the obligor or project owner on line preceded by "are held and firmly bonded to." Then write down how much money is at issue in this bond. Once that's done sign your signature where requested with a notary public present who will then make sure it was signed legally.

The 3Cs are an acronym for Character, Credit, and Capacity. Together they make up the three distinct categories that contract Surety bond underwriters look at before issuing bonds such as bid bonds, Performance Bonds and payment bonds.

In effect, a surety acts as a guarantee that a person or an organization assumes responsibility for fulfilling financial obligations in the event that the debtor defaults and is unable to make payments. The party that guarantees the debt is referred to as the surety or the guarantor.

A number of these factors fall under what the Surety industry calls “The Three C's”; Character, Capacity, and Capital. All three of these are important to the underwriting process. The principal needs to exhibit the Character, Capacity, and Capital to qualify for surety credit.

In doing so, as is industry practice, the surety will focus on the three “C's”: capital, capacity, and character. A surety must ensure that a principal has the financial wherewithal to be able to complete a project and fulfill its obligations under a contract.

A Surety Agreement Defined They differ from an insurance contract in that an insurance contract includes two entities (insurance provider and policyholder), whereas a surety bond involves three parties: the Principal, the Obligee and the Surety.