California Surety Bonds

What is a surety bond?

A surety bond is an important part of many construction projects. Being vital to doing business as a contractor, it's important to understand what surety bonds are and how they work. Here at Commercial Surety Bond Agency we invest in California contractors and endeavor to see them grow. As part of that effort, we work to improve the financial literacy of those in this industry by making available necessary information.

A surety bond is a three-party agreement that legally binds the principal, an obligee, and a surety company. The principal is the contractor who needs the bond, the obligee is the project owner or general contractor who requires the bond, and the surety company provides the surety bond service.

How does a surety bond work?

Essentially the bond guarantees that the principal will fulfill the financial obligations of the contract. If they fail to do so, the surety bond will cover the damages and losses. The simplest way to put this is that if a contractor doesn’t complete the project or pay their subcontractors, vendors, or laborers then the surety bond will pay via a claim made. 

You’ll likely find a surety bond is required for public construction projects using tax dollars. Having this condition for bidding on a job helps protect taxpayers as well as those working on the project. 

If you have any questions about our California surety bond services or wish to partner with CSBA for your contractor bond needs, we invite you to contact us.


The three most common types of surety bonds are:

No. You don’t pay month-to-month for sureties. When you are quoted a price for a surety bond, you make a one-time payment.

Applying for a surety bond, no matter the sort of bond, is to contact a surety agency. For instance, you can reach CSBA here to get started on obtaining your surety bond. 

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