The obligee is the protected party receiving the promise. In construction, the obligee is the job owner. The principal is the party who must perform the promise. In construction, the principal is the contractor performing the work under the contract. A bond should never be confused with insurance.
Insurance contemplates losses.
They are expected. In surety, losses are not contemplated. If all parties to the three-party surety agreement perform as they should, there should be no losses. One final difference between insurance and surety is the actual obligations of the principals. Insurance is a deal to transfer risk of expected losses in exchange for a fixed premium.