Bonds are not standard insurance contracts and the insurer is often known as the Surety. They are not based on the principal of indemnity, but are financial guarantees. By means of a bond, a guarantee is given to a third party that a monetary sum will be available should a specific event occur. This bond acts to protect the financial position of that third party. However, should the event occur and payment is made, the surety has the right to recover the amount paid from the person who entered into the bond.