What is the Security Bond?
Basically, the Security Bond is an instrument that obligates the employer to put up a security deposit of five thousand Singapore dollars or get a bank (or, more often, an insurance company) to pledge the amount which may be forfeited if the employer breaches the terms of the Security Bond.
In executing the Security Bond the employer promises, among other things, to cancel the work permit of the maid (the foreign domestic worker, FDW) and repatriate her when she stops working for her for one reason or another.
Failing to do so within one month of cancelling the FDW's work permit puts one at risk of having the security deposit forfeited.
If no security deposit in cash is furnished but a guarantee given instead, the guarantor (bank or insurance company) is required to pay up. It will then ask for reimbursement from the employer, who when applying to the insurance company agrees to indemnify it against such a loss.