For centuries surety bonds have been a very valuable tool. While the suretyship has an extended history, it wasn't till the 19th century that corporate surety bonds were used. The goal of everyone involved in a construction project is completion. Even though the purpose is to assure a skilled contractor capable of carrying out the project, contractors do experience many problems, and default occurs. But fortunately, these bonds protect both private and public owners from the huge costs of contractor default. Surety companies are paying millions of dollars in claims every year and offer financial and technical aid to contractors so you will get what you contracted for i.e. a completed project.
The surety industry is playing an important role in the construction industry's victory. Companies may provide monetary assistance directly to a bonded contractor, which makes the contractor to carry on his work program, pay subcontractor and supplier, and thus keeping the project moving forward. This support may be provided at the contractor's demand without the participation of the project owner and may occur without formal statement of default.
The surety industry is playing an important role in the construction industry's victory. Companies may provide monetary assistance directly to a bonded contractor, which makes the contractor to carry on his work program, pay subcontractor and supplier, and thus keeping the project moving forward. This support may be provided at the contractor's demand without the participation of the project owner and may occur without formal statement of default.