Federal or State surety bonds are required by the government to protect the tax payers investment. Usually these bonds are for construction projects these bonds guarantee that the project will be completed and the funds will be delegated appropriately.
If the contractor defaults on the surety bond the obligee can place a claim on the bond and recoup their loss.
Private obligee can also request for the contractors to become bonded to protect there investments.
Tags: federal bonds, state surety bonds, surety bond protect tax payers, Surety bonds
