The Infographic, “Surety Bond Companies: Types of Surety Bonds,” explains the various types of surety bonds and why they are useful.
One of the primary purposes of a surety bond is to protect project owners when hiring a contractor. The process usually begins when the project owner opens their project open for bidding. The contractor files for a Surety Bond from a surety company to assure the obligee (the project owner) that they have the resources available to complete the project.
If for any reason, the project is not completed according to the terms of the contract, then the obligee will be compensated for the amount promised in the Surety Bond. For more information on the process, refer to the infographic below.