Functions performed by Contract Surety Bonds
- Guarantee that the bonded project will be completed according to the terms of the contract and at the determined contract price;
- Guarantee that the laborers, suppliers, and subcontractors will be paid even if the contractor defaults and can result in lower prices and expedited deliveries;
- Smooth the transition from construction to permanent financing by eliminating liens;
- Reduce the possibility of a contractor diverting funds from the project;
- Provide an intermediary - the surety - to whom the owner can air complaints and grievances;
- Lower the cost of construction in some cases by facilitating the use of competitive bids.