Construction Contract Bonds

Abstract

The surety industry and its procedures are unfamiliar to many project owners, design professionals, and contractors. This lack of knowledge often leads to misunderstandings and disputes. This paper outlines significant issues related to surety contract bonds and is the second part of a study focused on the surety industry. Regulation of sureties providing surety contract bonds is described, and factors influencing premiums are discussed. Rate tables compiled by the Surety Association of America are presented with example premium computations. Typical disputes arising from surety contract bonds are also outlined. Special concerns currently confronting the surety industry are described along with alternatives to surety bonding.