While the subject of this chapter is entitled, “The Role of the Surety in a Construction Project,”
the truth is that, in an ideal world, the surety’s role in a given construction project for which it has
issued a bond would be minimal if any at all. However, many construction projects do not follow what many consider the “ideal” path.

Instead, each phase of a project is fraught with the potential for problems, such as delays,
payment disputes between a contractor and its subcontractors and suppliers, or disputes between the owner and contractor for extra work. Any one of these issues risks derailing the project’s timely
completion and the financial solvency of all involved. With that in mind, various types of surety bonds exist that can add a measure of financial security by transferring the risk of those occurrences to the surety.

Thus, in the construction context, this paper will set forth the various surety tools – the bid
bond, the performance bond, and the payment bond – available to provide some measure of assurance that the project will be completed in accordance with the contract documents.