{ "$schema": "https://bestinsuranceresearch.com/llms-full.txt", "recordType": "coverage", "id": "surety-bonds", "canonicalUrl": "https://bestinsuranceresearch.com/insurance/surety-bonds", "contentVersion": "2026.08.31", "generatedFor": "2026-09-07", "operator": { "legalName": "WJB Services, Inc.", "dba": "Bollinsure Insurance Services", "license": "6013787", "licenseAuthority": "California Department of Insurance" }, "license": "Text on this page may be quoted with attribution and a link to the canonical URL.", "notice": "Public page facts only. This record contains no visitor question, no tool input, and no identifier. It is not a coverage determination, an eligibility decision, or individualized advice.", "name": "Surety bonds", "line": "surety", "family": "commercial", "definition": "A promise to be liable for the debt, default or failure of another. A surety bond is a three-party contract in which the surety guarantees the performance of the principal to a third party, the obligee. California regulates it as insurance, defining surety insurance to include guaranteeing the performance of contracts and executing bonds and undertakings required by law, but it does not behave like insurance: the surety does not expect to bear the loss, and the principal signs an indemnity agreement obliging it to pay the surety back.", "protects": [ "The obligee, meaning the party to whom the bond is given, which in construction is the project owner or the prime contractor", "On a federal public works contract, persons supplying labor and material, through a payment bond furnished for their protection", "In California, a narrow statutory list of people damaged by a licensed contractor, chiefly homeowners and unpaid employees", "Not the principal. The surety expects to be indemnified and reimbursed by the principal for any payment it makes" ], "commonlyCovers": [ { "item": "Performance of a bonded contract", "note": "Before a federal contract of more than $100,000 for construction, alteration or repair of a public building or public work is awarded, a performance bond must be furnished with a surety satisfactory to the awarding officer, in an amount the officer considers adequate." }, { "item": "Payment of those who supplied labor and material", "note": "A payment bond must be furnished for the protection of all persons supplying labor and material in carrying out the work, and its amount equals the total amount payable under the contract unless the awarding officer determines otherwise in writing supported by specific findings." }, { "item": "A licensed contractor's compliance with California licence law", "note": "The Contractors State License Board requires a contractor's bond of twenty-five thousand dollars as a condition of issuance, reinstatement, reactivation, renewal or continued maintenance of a licence." }, { "item": "Unpaid wages and fringe benefits of a contractor's employees", "note": "The California bond runs to an employee damaged by the licensee's failure to pay wages, and to a person or entity damaged by failure to pay fringe benefits for employees." }, { "item": "The bid, the warranty period, and the stages between", "note": "The main types of contract surety bond are bid bonds, performance bonds, payment bonds, and warranty or maintenance bonds." } ], "commonlyExcludes": [ { "item": "The principal's own losses", "note": "A fundamental concept of suretyship is that the surety will not sustain a loss. It expects reimbursement from the principal and indemnitors under the indemnity agreement, so a bond is not protection for the party that buys it." }, { "item": "Ordinary defective work, as far as the general public is concerned", "note": "The California contractor's bond reaches a person other than a homeowner or employee only on a willful and deliberate violation of the chapter, or on fraud by the licensee in the execution or performance of a construction contract." }, { "item": "An owner building a single-family dwelling intended for sale", "note": "That owner recovers under subdivision (b) only if the dwelling is not intended for sale or offered for sale at the time the damages were incurred." }, { "item": "Most of the $25,000 for anyone who is not a homeowner", "note": "Excluding claims by the subdivision (a) beneficiaries, the aggregate liability of the surety on claims against the bond shall not exceed seven thousand five hundred dollars, and the proceeds above that figure are reserved exclusively for those beneficiaries." }, { "item": "Anything once the bond is exhausted", "note": "The bond amount is not per job. It is the amount available for all the jobs a contractor takes on during the life of the bond, and once depleted the contractor must buy a new one for the licence to remain in effect." }, { "item": "A claim brought too late, or noticed too late", "note": "A Miller Act action must be brought no later than one year after the day the claimant last performed labor or supplied material, and a claimant one tier below the prime must additionally give written notice within 90 days of that same date." } ], "limitsAndDeductibles": [ "There is no deductible in the insurance sense. The principal's exposure is the whole of it, through the general agreement of indemnity.", "The California contractor's bond is twenty-five thousand dollars, but that figure is misleading read alone: claims other than those of the subdivision (a) beneficiaries are capped in aggregate at seven thousand five hundred dollars.", "The bond is an aggregate across all jobs during its life rather than a limit per project.", "CSLB may require an applicant to post a bond in twice the amount where the applicant has been convicted of a violation of section 7028 or cited under section 7028.7 reduced to a final order, and the violation constituted a substantial injury to the public.", "A federal performance bond is in an amount the awarding officer considers adequate for the protection of the Government, rather than a fixed statutory figure.", "A federal payment bond equals the total amount payable by the terms of the contract, unless the awarding officer determines otherwise in a writing supported by specific findings.", "Under a bid bond the surety's liability is generally limited to the penal sum of the bond, typically in the range of 5 to 20 percent of the contract bid price.", "Bonds are non-cancelable and must be paid for when executed.", "For federal construction contracts greater than $35,000 but not greater than $150,000, the contracting officer selects two or more alternative payment protections rather than requiring a payment bond, from a payment bond, an irrevocable letter of credit, a tripartite escrow agreement, certificates of deposit, and a deposit of specified assets." ], "endorsements": [ { "item": "The general agreement of indemnity", "note": "Not an endorsement but the document that governs the relationship. It obliges the contractor and other indemnitors to repay the surety for any loss or expense from having issued bonds, is required before any bond is issued, and applies to all bonds issued for that principal." }, { "item": "Personal and spousal indemnity", "note": "A surety almost always requires the principal, the individuals who own or control the company, their spouses, and often affiliated companies to sign that agreement." }, { "item": "A disciplinary bond", "note": "CSLB may require a separate bond from contractors who have been disciplined, and some licence qualifiers including responsible managing employees must have their own twenty-five thousand dollar bond on file." }, { "item": "SBA guarantee support", "note": "A federal programme guarantees bonds for contractors that a surety would not otherwise support, with its own definitions of the terms it uses." } ], "relatedPolicies": [ "Commercial general liability, which is two-party insurance and answers a different question entirely", "Workers compensation, which a bonded contractor will normally also carry", "Contractual risk transfer arrangements, where indemnity and additional insured status sit alongside bonding on the same project" ], "underwritingInputs": [ "Financial capacity, net worth, cash flow and assets, because obtaining a bond resembles obtaining bank credit more than buying insurance [S:nasbp-32-questions-contract-bonding]", "Work in progress and work history, including expertise and experience [S:nasbp-32-questions-contract-bonding]", "The banking relationship and the character of the contractor [S:nasbp-32-questions-contract-bonding]", "The nature of the project to be bonded [S:nasbp-32-questions-contract-bonding]", "Whether the individuals who own or control the company, and their spouses, will sign the indemnity agreement [S:nasbp-32-questions-contract-bonding]", "Whether the contract is federal and exceeds the Miller Act threshold [S:usc-40-3131-miller-act]", "Whether the licensee has a disciplinary history that triggers a doubled bond [S:ca-bpc-7071-6-contractor-bond]", "Whether the licence is active, since no bond is required while it is inactive on the board's official records [S:ca-bpc-7071-6-contractor-bond]" ], "stateVariations": [ { "state": "CA", "note": "The twenty-five thousand dollar contractor's bond, the seven thousand five hundred dollar aggregate cap for non-homeowner claims, and the beneficiary list are California licence law and do not describe bonding requirements elsewhere." } ], "effectiveDate": "2026-09-06", "lastReviewed": "2026-09-06", "author": "Aaron Bollinger", "reviewer": "Brian Bollinger", "sourceIds": [ "nasbp-32-questions-contract-bonding", "ca-ins-code-105-surety-insurance", "ca-bpc-7071-6-contractor-bond", "ca-bpc-7071-5-bond-beneficiaries", "cslb-license-bonds-fast-facts", "usc-40-3131-miller-act", "usc-40-3133-miller-act-claims", "far-28-102-1", "ca-civ-code-2847-surety-reimbursement", "cfr-13-115-10-sba-definitions", "sba-surety-bond-guarantee-program" ], "sources": [ { "id": "nasbp-32-questions-contract-bonding", "title": "Answers to 32 Questions Public and Private Owners Ask About Contract Bonding", "publisher": "National Association of Surety Bond Producers (NASBP), SuretyLearn.org", "url": "https://www.nasbp.org/wp-content/uploads/2024/11/32Q_NASBP_8-18_newadd.pdf", "sourceType": "secondary-analysis", "jurisdiction": "US", "authorityLevel": "secondary", "primary": false, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Periodically revised by NASBP; the fetched file is dated 8-18 in its filename", "status": "active", "supportsClaims": [ "A surety bond is a promise to be liable for the debt, default, or failure of another, and is a three-party contract by which one party, the surety, guarantees the performance of a second party, the principal, to a third party, the obligee.", "The surety is an insurance company licensed by a state department of insurance to provide surety bonds to guarantee the performance of a principal.", "The obligee is the entity with whom the principal has a contract and to whom the bond is given; in construction this is the project owner or the prime contractor.", "If the owner is the bond obligee, then the prime contractor is the principal; if the prime contractor is the obligee, then the subcontractor is the principal.", "Surety bonds are almost always written by insurance companies that are licensed by state insurance departments, but they are not like traditional insurance policies: surety bonds are three-party agreements and traditional insurance policies, such as life insurance or property insurance policies, are two-party agreements.", "The surety does not assume the primary obligation but is secondarily liable if the principal defaults on its bonded obligation.", "A surety does not expect to suffer losses because the surety expects the bonded principal to perform its contractual obligations and because the surety has a signed indemnity agreement from the contractor to protect the surety from any losses the surety suffers as a result of having issued bonds.", "A general agreement of indemnity is a contract between a surety company and a contractor that obligates the contractor and other indemnitors to protect the surety company from any loss or expense that the surety has as a result of having issued bonds on behalf of the bond principal, and if the contractor fails to fulfill its bonded obligation and the surety suffers any loss, the indemnitors are legally bound to indemnify, or pay back, the surety for its losses.", "A fundamental concept of suretyship is that the surety will not sustain a loss; the surety expects to be indemnified and reimbursed for any payments or losses by the principal and indemnitors under the indemnity agreement, so the general agreement of indemnity is needed before the surety issues any bonds and applies to all bonds issued by the surety for the principal.", "A surety company that issues bonds on behalf of a contractor almost always requires that the principal, the individuals who own or control the company, their spouses, and often affiliated companies sign the general agreement of indemnity.", "Obtaining bonds is more like obtaining bank credit than purchasing insurance, and almost all sureties consider financial capacity, net worth, cash flow, assets, credit score, work in progress, work history including expertise and experience, banking relationship, nature of the project to be bonded, and character of the contractor.", "The main types of contract surety bonds are bid bonds, performance bonds, payment bonds, and warranty bonds, sometimes called maintenance bonds.", "Under a bid bond, the surety's liability is generally limited to the face amount, or penal sum, of the bond, which is typically in the range of 5 to 20 percent of the contract bid price.", "The cost of a bond is based on rates filed by insurance companies with the state insurance department and is based on the contract amount; it can vary from less than 0.5 percent to as much as 3 percent of the contract price, and for a small and emerging contractor with minimal experience a contractor can expect to pay 2 to 3 percent of the contract price.", "Bonds must be paid when they are executed, and bonds are non-cancelable." ] }, { "id": "ca-ins-code-105-surety-insurance", "title": "California Insurance Code section 105 - Surety insurance", "publisher": "California Legislative Counsel (leginfo.legislature.ca.gov)", "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS§ionNum=105", "sourceType": "statute", "jurisdiction": "CA", "authorityLevel": "primary-law", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Amended only by act of the Legislature", "status": "active", "supportsClaims": [ "Surety insurance includes the guaranteeing of behavior of persons and the guaranteeing of performance of contracts, including executing or guaranteeing bonds and undertakings required or permitted in all actions or proceedings or by law allowed, other than insurance policies and other than for payments secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate.", "Surety insurance also includes insurance against loss resulting from the forgery or alteration of any instrument or of any signature on it.", "No insurance may be written as surety insurance if it falls within the definition of financial guaranty insurance as set forth in Section 12100." ] }, { "id": "ca-bpc-7071-6-contractor-bond", "title": "California Business and Professions Code section 7071.6 - Contractor's bond", "publisher": "California Legislative Counsel (leginfo.legislature.ca.gov)", "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC§ionNum=7071.6", "sourceType": "statute", "jurisdiction": "CA", "authorityLevel": "primary-law", "primary": true, "publishedDate": "unknown", "effectiveDate": "unknown", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Amended by act of the Legislature", "status": "active", "supportsClaims": [ "The board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee file or have on file a contractor's bond in the sum of twenty-five thousand dollars ($25,000).", "Excluding the claims brought by the beneficiaries specified in subdivision (a) of Section 7071.5, the aggregate liability of a surety on claims brought against a bond required by this section shall not exceed the sum of seven thousand five hundred dollars ($7,500).", "The bond proceeds in excess of seven thousand five hundred dollars ($7,500) shall be reserved exclusively for the claims of the beneficiaries specified in subdivision (a) of Section 7071.5.", "A bond shall not be required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.", "Notwithstanding any other law, as a condition precedent to licensure, the board may require an applicant to post a contractor's bond in twice the amount required pursuant to subdivision (a) until the time that the license is renewed, where the applicant has either been convicted of a violation of Section 7028 or has been cited pursuant to Section 7028.7, where any such citation has been reduced to a final order of the registrar, and where the violation or the basis for the citation constituted a substantial injury to the public.", "The section carries the notation Repealed and added by Stats. 2021, Ch. 367, Sec. 17 (SB 607), effective January 1, 2022, operative January 1, 2023." ] }, { "id": "ca-bpc-7071-5-bond-beneficiaries", "title": "California Business and Professions Code section 7071.5 - who the contractor's bond is for the benefit of", "publisher": "California Legislative Counsel (leginfo.legislature.ca.gov)", "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC§ionNum=7071.5", "sourceType": "statute", "jurisdiction": "CA", "authorityLevel": "primary-law", "primary": true, "publishedDate": "unknown", "effectiveDate": "unknown", "accessedDate": "2026-09-06", "lastChecked": "2026-09-06", "updateCadence": "Amended only by legislation.", "status": "active", "supportsClaims": [ "Section 7071.5(a) provides that the contractor's bond is for the benefit of a homeowner contracting for home improvement upon the homeowner's personal family residence damaged as a result of a violation of the chapter by the licensee.", "Section 7071.5(b) provides that the bond is for the benefit of a property owner contracting for the construction of a single-family dwelling who is damaged as a result of a violation of the chapter by the licensee, and provides that the property owner shall only recover under that subdivision if the single-family dwelling is not intended for sale or offered for sale at the time the damages were incurred.", "Section 7071.5(c) provides that the bond is for the benefit of a person damaged as a result of a willful and deliberate violation of the chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract.", "Section 7071.5(d) provides that the bond is for the benefit of an employee of the licensee damaged by the licensee's failure to pay wages.", "Section 7071.5(e) provides that the bond is for the benefit of a person or entity, including a laborer described in subdivision (b) of Section 8024 of the Civil Code, to which a portion of the compensation of an employee of a licensee is paid by agreement with that employee or the collective bargaining agent of that employee, damaged as the result of the licensee's failure to pay fringe benefits for its employees." ] }, { "id": "cslb-license-bonds-fast-facts", "title": "Fast Facts: A Guide to Contractor License Bonds (Rev. 12/22)", "publisher": "California Contractors State License Board (CSLB), Department of Consumer Affairs", "url": "https://cslb.ca.gov/Resources/GuidesAndPublications/ContractorsLicenseBondsGuide.pdf", "sourceType": "regulator-guidance", "jurisdiction": "CA", "authorityLevel": "regulator", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Revised periodically by CSLB; the fetched edition is marked Rev. 12/22", "status": "active", "supportsClaims": [ "To get a California contractor license, contractors must post a surety bond or cashier's check with CSLB.", "The bond or cashier's check is filed for the benefit of consumers who may be damaged because of defective construction or other violations of contractors' state license law, and for employees who have not been paid wages they are owed.", "Contractors commonly use a surety bond, referred to as a contractor license bond, where a surety company promises the State of California that it will pay damages if the contractor violates contractors' state license law.", "The current amount of the contractor license bond is $25,000; the bond amount is not per job, it is the amount available for all the jobs a contractor takes on during the life of the bond.", "Once the bond has been depleted, a contractor must purchase a new one for the license to remain in effect.", "Those who can make a claim against a contractor bond include any homeowner who contracts for home improvements or for construction of a single-family dwelling damaged because of a violation of contractors' state license law by the licensee; someone damaged as a result of a willful and deliberate violation of that law or by fraud committed by a licensee in the execution or performance of a construction contract; any employee of the licensee damaged by failure to pay wages; and any person or entity damaged as a result of the licensee's failure to pay fringe benefits for eligible employees.", "To file a claim against a bond, a consumer should contact the contractor's surety company and include a detailed written description of the problem, a copy of the contract, and all other pertinent documents and information.", "The guide states that a consumer who is not satisfied with the response of the surety company may take the contractor to small claims court for amounts up to $10,000, and that claims above $10,000 must be filed in a superior court.", "CSLB may require a separate bond, referred to as a disciplinary bond, for contractors who have been disciplined, and some license qualifiers, including responsible managing employees, are required to have a $25,000 bond on file with CSLB.", "The surety company will investigate any claim filed against the bond and CSLB will investigate any complaint filed against the license, and CSLB and the surety company will independently resolve the issues under their respective jurisdictions.", "The document carries the footer Rev. 12/22." ] }, { "id": "usc-40-3131-miller-act", "title": "40 U.S.C. 3131 - Bonds of contractors of public buildings or works (Miller Act)", "publisher": "Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)", "url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title40-section3131&num=0&edition=prelim", "sourceType": "statute", "jurisdiction": "US", "authorityLevel": "primary-law", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Amended by act of Congress; codified in title 40 chapter 31 subchapter III", "status": "active", "supportsClaims": [ "In this subchapter, the term contractor means a person awarded a contract described in subsection (b).", "Before any contract of more than $100,000 is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government, a person must furnish to the Government a performance bond and a payment bond, which become binding when the contract is awarded.", "The performance bond must be with a surety satisfactory to the officer awarding the contract, and in an amount the officer considers adequate, for the protection of the Government.", "The payment bond must be with a surety satisfactory to the officer for the protection of all persons supplying labor and material in carrying out the work provided for in the contract.", "The amount of the payment bond shall equal the total amount payable by the terms of the contract unless the officer awarding the contract determines, in a writing supported by specific findings, that a payment bond in that amount is impractical, in which case the contracting officer shall set the amount; the amount of the payment bond shall not be less than the amount of the performance bond.", "Every performance bond required under this section specifically shall provide coverage for taxes the Government imposes which are collected, deducted, or withheld from wages the contractor pays in carrying out the contract.", "A contracting officer may waive the requirement of a performance bond and payment bond for work under a contract that is to be performed in a foreign country if the officer finds that it is impracticable for the contractor to furnish the bonds.", "This section does not limit the authority of a contracting officer to require a performance bond or other security in addition to those, or in cases other than the cases, specified in subsection (b)." ] }, { "id": "usc-40-3133-miller-act-claims", "title": "40 U.S.C. 3133 - Rights of persons furnishing labor or material (Miller Act payment bond claims)", "publisher": "Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)", "url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title40-section3133&num=0&edition=prelim", "sourceType": "statute", "jurisdiction": "US", "authorityLevel": "primary-law", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-09-06", "lastChecked": "2026-09-06", "updateCadence": "Amended only by legislation.", "status": "active", "supportsClaims": [ "Section 3133(b)(1) provides that every person that has furnished labor or material in carrying out work provided for in a contract for which a payment bond is furnished under section 3131, and that has not been paid in full within 90 days after the day on which the person did or performed the last of the labor or furnished or supplied the material for which the claim is made, may bring a civil action on the payment bond for the amount unpaid at the time the civil action is brought, and may prosecute the action to final execution and judgment for the amount due.", "Section 3133(b)(2) provides that a person having a direct contractual relationship with a subcontractor but no contractual relationship, express or implied, with the contractor furnishing the payment bond may bring a civil action on the payment bond only on giving written notice to the contractor within 90 days from the date on which that person did or performed the last of the labor or furnished or supplied the last of the material for which the claim is made.", "Section 3133(b)(2) requires that notice to be served by any means that provides written, third-party verification of delivery to the contractor at any place the contractor maintains an office or conducts business or at the contractor's residence, or in any manner in which the United States marshal of the district in which the public improvement is situated may by law serve summons.", "Section 3133(b)(3) requires a civil action brought under that subsection to be brought in the name of the United States for the use of the person bringing the action, and in the United States District Court for any district in which the contract was to be performed and executed, regardless of the amount in controversy.", "Section 3133(b) provides that an action brought under that subsection must be brought no later than one year after the day on which the last of the labor was performed or material was supplied by the person bringing the action.", "Section 3133(c) provides that a waiver of the right to bring a civil action on a payment bond required under the subchapter is void unless the waiver is in writing, is signed by the person whose right is waived, and is executed after the person whose right is waived has furnished labor or material for use in the performance of the contract." ] }, { "id": "far-28-102-1", "title": "FAR 28.102-1 - Performance and payment bonds and alternative payment protections for construction contracts, General", "publisher": "U.S. General Services Administration (Acquisition.gov, Federal Acquisition Regulation)", "url": "https://www.acquisition.gov/far/28.102-1", "sourceType": "regulation", "jurisdiction": "US", "authorityLevel": "regulator", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Updated by Federal Acquisition Circulars", "status": "active", "supportsClaims": [ "FAR 28.102-1(a) states that 40 U.S.C. chapter 31, subchapter III, Bonds, formerly known as the Miller Act, requires performance and payment bonds for any construction contract exceeding $150,000, except that this requirement may be waived, first by the contracting officer for work performed in a foreign country upon a finding that it is impracticable for the contractor to furnish the bonds, and second as otherwise authorized by the Bonds statute or by other law.", "Pursuant to 40 U.S.C. 3132, for construction contracts greater than $35,000 but not greater than $150,000, the contracting officer shall select two or more of the listed payment protections, giving particular consideration to inclusion of an irrevocable letter of credit as one of the selected alternatives.", "The payment protections the contracting officer selects from are a payment bond, an irrevocable letter of credit, a tripartite escrow agreement, certificates of deposit, and a deposit of the types of security listed in FAR 28.204-1 and 28.204-2.", "The contractor shall submit to the Government one of the payment protections selected by the contracting officer.", "The contractor shall furnish all bonds or alternative payment protection, including any necessary reinsurance agreements, before receiving a notice to proceed with the work or being allowed to start work." ] }, { "id": "ca-civ-code-2847-surety-reimbursement", "title": "California Civil Code section 2847 - Reimbursement of surety by principal", "publisher": "California Legislative Counsel (leginfo.legislature.ca.gov)", "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=2847", "sourceType": "statute", "jurisdiction": "CA", "authorityLevel": "primary-law", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Enacted 1872; amended only by act of the Legislature", "status": "active", "supportsClaims": [ "If a surety satisfies the principal obligation, or any part thereof, whether with or without legal proceedings, the principal is bound to reimburse what the surety has disbursed, including necessary costs and expenses.", "The surety has no claim for reimbursement against other persons, though they may have been benefited by its act, except as prescribed by the next section.", "The section carries the notation Enacted 1872." ] }, { "id": "cfr-13-115-10-sba-definitions", "title": "13 CFR 115.10 - Definitions (SBA Surety Bond Guarantee Program)", "publisher": "Cornell Legal Information Institute (reproducing the Code of Federal Regulations)", "url": "https://www.law.cornell.edu/cfr/text/13/115.10", "sourceType": "regulation", "jurisdiction": "US", "authorityLevel": "primary-law", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Amended through the Federal Register as SBA revises part 115", "status": "active", "supportsClaims": [ "These are definitions in 13 CFR part 115, the SBA Surety Bond Guarantee Program; they define the terms for that program.", "Principal means, in the case of a Bid Bond, the Person bidding for the award of a Contract, and in the case of a Final Bond or an Ancillary Bond, the Person primarily liable to complete the Contract or to make Contract-related payments.", "Obligee means, in the case of a Bid Bond, the Person requesting bids for the performance of a Contract, and in the case of a Final Bond, the Person who has contracted with a Principal for the completion of the Contract and to whom the primary obligation of the Surety runs in the event of a breach by the Principal.", "Surety means a company which, under the terms of a Bid Bond, agrees to pay a sum of money to the Obligee if the Principal breaches the conditions of the bond; under the terms of a Performance Bond, agrees to pay a sum of money or to incur the cost of fulfilling the terms of a Contract; and under the terms of a Payment or an Ancillary Bond, agrees to make payment to all who have a right of action against such bond.", "The term Surety includes an agent, independent agent, underwriter, or any other company or individual empowered to act on behalf of the Surety.", "A Bid Bond is a bond conditioned upon the bidder on a Contract entering into the Contract and furnishing the required Payment and Performance Bonds.", "A Performance Bond is a bond conditioned upon the completion by the Principal of a Contract in accordance with its terms.", "A Payment Bond is a bond conditioned upon the payment by the Principal of money to persons who have a right of action against such bond, and a Payment Bond cannot require the Surety to pay an amount which exceeds the claimant's actual loss or damage.", "A Final Bond means a Performance Bond and/or a Payment Bond.", "An Ancillary Bond is a bond incidental and essential to the performance of a Contract for which there is a guaranteed Final Bond.", "No Person other than a Federal department or agency may be named co-Obligee or Obligee on a bond or a rider unless bound by the Contract to the same extent as the original Obligee, and adding co-Obligees may not increase the aggregate liability of the Surety under the bond." ] }, { "id": "sba-surety-bond-guarantee-program", "title": "Surety bonds - Funding Programs", "publisher": "U.S. Small Business Administration", "url": "https://www.sba.gov/funding-programs/surety-bonds", "sourceType": "regulator-guidance", "jurisdiction": "US", "authorityLevel": "regulator", "primary": true, "publishedDate": "unknown", "effectiveDate": "n/a", "accessedDate": "2026-08-31", "lastChecked": "2026-08-31", "updateCadence": "Updated by SBA as program parameters change; contract limits are periodically adjusted", "status": "active", "supportsClaims": [ "SBA guarantees surety bonds issued by certain surety companies for qualified small businesses.", "The bond types SBA guarantees include bid bonds, payment bonds, performance bonds, and ancillary bonds.", "All performance and payment bond guarantees require small businesses to pay SBA a fee of 0.6 percent of the contract price.", "SBA does not charge a fee for bid bond guarantees.", "SBA-guaranteed bonds cover contracts up to $9 million for non-federal contracts and up to $14 million for federal contracts." ] } ] }