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A professional bond, also known as a surety bond, is a contractual agreement between three parties: the obligee, the principal, and the surety. The obligee is the party that requires the bond, the principal is the party that needs the bond, and the surety is the company that provides the bond. The purpose of the bond is to provide financial protection to the obligee in case the principal fails to fulfill the terms of the contract. In the event of a default, the surety will compensate the obligee for any losses incurred, up to the bond amount. Professional bonds are commonly required for various industries, including construction, healthcare, finance, and transportation.