Bid bonds, performance bonds, and payment bonds each serve a different purpose in construction projects. A bid bond helps protect project owners during the bidding process, a performance bond provides protection if a contractor fails to fulfill a bonded contract, and a payment bond helps protect eligible subcontractors and suppliers who are not paid. Learn how these bonds work, when they may be required, and how contractors can prepare to get bonded.

Who pays when a surety bond claim is filed? Learn how the surety bond claims process works, who pays a valid claim, and why the bonded business may ultimately be responsible for reimbursing the surety. This guide explains the roles of the principal, obligee, and surety, how claims are investigated, how indemnity agreements work, and how businesses can reduce the risk of claims while protecting their licensing and bonding relationships.