Every now and again I get a phone call from an obligee (the party that required the performance bond) asking me how to make a claim on a bond. This is really a pretty easy question to answer as the answer lies within the bond form itself.
In order to recover on a bond certain conditions must be met. In this case, an A312-Performance Bond (one of the more commonly required performance bond types), the surety’s obligations is triggered only after
A Surety Bond is Not an Insurance Contract. Most, if not all courts emphasize the unique nature of a surety contract. Insurance indemnifies another against loss, damage, or liability resulting from an uncertain event. A surety answers for the debt or default of another.
Sureties have the unenviable job of taking responsibility where others have failed. Rightfully, before a surety is required to undertake responsibility it may dictate its rights and the terms for its takeover for payment or performance.