The purpose of these financial guarantee surety bonds is to provide the government with a guarantee that excise taxes will be paid and assurance that the principal (brewer) will comply with all federal laws and regulations governing brewers. If the principal fails to pay their taxes or conduct business in a lawful manner, the harmed party can file a claim with the surety company. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim.
The principal is then responsible for reimbursing the surety for all monies paid out, including any attorney fees incurred by the surety in defense of the claim.