Generally speaking, a Surety Bond guarantees performance usually per a contract. If the Obligor fails to perform, the bond is paid out to the Obligee for their loss. A Fidelity Bond insures honesty and covers against employee dishonesty, general theft & fraud, etc.

When a Surety Bond is issued, losses are not expected. If a loss occurs, the Bond Company will pay out the amount of the bond but the Principal (Obligee) is expected to fully restore the Surety Company for any financial losses incurred after they fail to perform. With Insurance, you transfer your risk to the insurance company in exchange for your premium therefore it is expected that if a loss occurs, the insurance company will  pay the loss less your deductible with no requirement to be paid back. Bonds operate differently.