Surety bonds

Who or what it is designed to protect

• The obligee, meaning the party to whom the bond is given, which in construction is the project owner or the prime contractor [1]

• On a federal public works contract, persons supplying labor and material, through a payment bond furnished for their protection [6]

• In California, a narrow statutory list of people damaged by a licensed contractor, chiefly homeowners and unpaid employees [4]

• Not the principal. The surety expects to be indemnified and reimbursed by the principal for any payment it makes [1]

What it commonly covers

• Performance of a bonded contract. 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 [6].

• Payment of those who supplied labor and material. 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 [6].

• A licensed contractor's compliance with California licence law. 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 [3].

• Unpaid wages and fringe benefits of a contractor's employees. 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 [4].

• The bid, the warranty period, and the stages between. The main types of contract surety bond are bid bonds, performance bonds, payment bonds, and warranty or maintenance bonds [1].

What it commonly excludes or limits

• The principal's own losses. 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 [1].

• Ordinary defective work, as far as the general public is concerned. 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 [4].

• An owner building a single-family dwelling intended for sale. 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 [4].

• Most of the $25,000 for anyone who is not a homeowner. 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 [3].

• Anything once the bond is exhausted. 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 [5].

• A claim brought too late, or noticed too late. 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 [7].

Limits, deductibles, and conditions

• There is no deductible in the insurance sense. The principal's exposure is the whole of it, through the general agreement of indemnity [1].

• The California contractor's bond is twenty-five thousand dollars [3], 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 [3].

• The bond is an aggregate across all jobs during its life rather than a limit per project [5].

• 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 [3].

• 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 [6].

• 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 [6].

• 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 [1].

• Bonds are non-cancelable and must be paid for when executed [1].

• 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 [8].

Endorsements and connected policies

• The general agreement of indemnity. 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 [1].

• Personal and spousal indemnity. 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 [1].

• A disciplinary bond. 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 [5].

• SBA guarantee support. A federal programme guarantees bonds for contractors that a surety would not otherwise support, with its own definitions of the terms it uses [10][11].

Commonly written alongside: 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.

What actually goes wrong on this line

Exposures, as distinct from what the policy protects. This is the question an underwriter is asking, and the one to answer before judging a limit.

• Buying a bond and believing you are insured

  The surety does not assume the primary obligation and is only secondarily liable if the principal defaults [1]. Every dollar the surety pays out is a dollar it expects back from the contractor under the indemnity agreement, so a bond transfers no risk from the principal at all.

• Signing an indemnity agreement that reaches the household

  The agreement is typically signed by the owners, their spouses and affiliated companies [1], so a loss on one bonded job can follow personal assets. It is executed before any bond is issued and covers every bond thereafter.

• A depleted licence bond and a licence that stops working

  The California bond is an aggregate across all jobs, and once depleted a new one must be purchased for the licence to remain in effect [5]. Earlier claimants can therefore leave both later claimants and the contractor's own licence with nothing behind them.

• Missing the 90 day Miller Act notice

  A supplier with a contract with a subcontractor but none with the prime may bring an action on the payment bond only on giving written notice to the contractor within 90 days of its own last labor or material [7]. The clock runs from the claimant's own work, not from the day payment was refused.

• Signing away bond rights at the start of a job

  A waiver of the right to bring a civil action on a Miller Act payment bond is void unless in writing, signed by the person whose right is waived, and executed after that person has furnished labor or material [7]. A waiver buried in a subcontract at award is void, which cuts both ways depending on who is relying on it.

• Assuming the contractor's bond answers a commercial dispute

  The statutory beneficiaries are homeowners, single-family dwelling owners not building for sale, employees owed wages or fringe benefits, and persons damaged by willful and deliberate violation or fraud [4]. A commercial customer is not on that list.

What reduces the frequency or the severity

Things a reader can do, each tied to a published source. None of these is a promise about price: whether an insurer credits any of them is an underwriting decision and is not stated here.

• Diary the two Miller Act dates from your own last day on site

  Both the 90 day notice and the one year limitation run from the day the claimant last performed labor or supplied material [7], so the date to record is your own, fixed at the time, rather than the date an invoice went unpaid.

• Serve notice by a method that produces third-party proof of delivery

  The statute requires written, third-party verification of delivery to the contractor at a place it maintains an office or conducts business or at its residence, or service in the manner a United States marshal may serve summons [7].

• Read the indemnity agreement before the first bond, not the first loss

  It is required before any bond is issued and applies to every bond thereafter for that principal [1], so its terms are settled at the outset of the relationship and govern everything that follows.

• Check whether the licence bond has already been drawn on

  Because the amount is an aggregate over the life of the bond rather than per job [5], what remains behind a licence today is a different question from what the statutory figure says.

• Bring documents when making a claim on a licence bond

  The published guidance asks a claimant to contact the surety with a detailed written description of the problem, a copy of the contract, and all other pertinent documents and information [5].

• Treat the board complaint and the bond claim as separate tracks

  The surety investigates the claim against the bond and the board investigates the complaint against the licence, and the two resolve the issues independently under their respective jurisdictions [5].

Information an underwriter commonly requests

This is what is usually asked, not a legal requirement and not a promise that supplying it produces an offer.

• Financial capacity, net worth, cash flow and assets, because obtaining a bond resembles obtaining bank credit more than buying insurance [1]
• Work in progress and work history, including expertise and experience [1]
• The banking relationship and the character of the contractor [1]
• The nature of the project to be bonded [1]
• Whether the individuals who own or control the company, and their spouses, will sign the indemnity agreement [1]
• Whether the contract is federal and exceeds the Miller Act threshold [6]
• Whether the licensee has a disciplinary history that triggers a doubled bond [3]
• Whether the licence is active, since no bond is required while it is inactive on the board's official records [3]

State variations

• CA. 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 [3][4].

Source ledger

11 sources. Every citation number above resolves to a record below. Nothing here sits behind an account.

1. [1]

   Answers to 32 Questions Public and Private Owners Ask About Contract Bonding(opens the original record on National Association of Surety Bond Producers (NASBP), SuretyLearn.org)

   National Association of Surety Bond Producers (NASBP), SuretyLearn.orgSecondarySecondaryJurisdiction USLast checked August 31, 2026Updates: Periodically revised by NASBP; the fetched file is dated 8-18 in its filenameID nasbp-32-questions-contract-bonding

   What this source supports (15)

   • 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.

   Downloaded 2026-08-31 and extracted with pdftotext, then read the relevant question and answer blocks directly. This is a trade association publication and is labeled secondary. It is used for the three-party structure, the credit-versus-insurance contrast, the general agreement of indemnity, bid bond penal sums, and pricing practice. Statutory and regulatory points rest on primary sources instead. The document's penal sum statements are specific to bid bonds and to dual obligee savings clauses; no general penal sum rule is claimed from it here.

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2. [2]

   California Insurance Code section 105 - Surety insurance(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked August 31, 2026Updates: Amended only by act of the LegislatureID ca-ins-code-105-surety-insurance

   What this source supports (3)

   • 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.

   Re-fetched 2026-08-31; subdivisions (a) through (d) read verbatim. This is a definitional and classification provision. It does not license or regulate anyone, so it is not used to support any licensing statement, and an inference about surety being a regulated class was removed from the claims array. It says nothing about bail bonds.

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3. [3]

   California Business and Professions Code section 7071.6 - Contractor's bond(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked August 31, 2026Updates: Amended by act of the LegislatureID ca-bpc-7071-6-contractor-bond

   What this source supports (6)

   • 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.

   Re-verified 2026-08-31 against the California Legislative Counsel's own text; subdivisions (a) through (d) and the legislative history were read verbatim, and the $25,000 figure in subdivision (a) is confirmed as the current amount. publishedDate reflects the chaptering of SB 607 (Stats. 2021, Ch. 367); effectiveDate is the January 1, 2022 effective date, with a January 1, 2023 operative date. Two omissions were repaired in this revision. The earlier fetch returned only the first sentence of subdivision (b), so the card was silent on where proceeds above the $7,500 cap go; the second sentence, reserving them exclusively for the section 7071.5(a) beneficiaries, is now carried, because the cap alone reads as though the rest of the bond is unavailable to anyone. Subdivision (d), which lets the board require a bond in twice the subdivision (a) amount on the three stated conditions, was missing entirely and has been added. An inference about the bond being imposed by statute rather than by contract remains out of the claims array. Published: 2021-10-08 Effective: 2022-01-01

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4. [4]

   California Business and Professions Code section 7071.5 - who the contractor's bond is for the benefit of(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked September 6, 2026Updates: Amended only by legislation.ID ca-bpc-7071-5-bond-beneficiaries

   What this source supports (5)

   • 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.

   Read this alongside section 7071.6, which sets the bond amount and reserves the proceeds above seven thousand five hundred dollars exclusively for the subdivision (a) beneficiaries. The list is narrower than the phrase contractor's bond suggests: subdivision (c) reaches a general member of the public only on a willful and deliberate violation or on fraud, not on ordinary defective work, and subdivision (b) excludes an owner building a single-family dwelling that was intended for or offered for sale when the damage was incurred. A commercial customer of a licensed contractor is not on the list at all.

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5. [5]

   Fast Facts: A Guide to Contractor License Bonds (Rev. 12/22)(opens the original record on California Contractors State License Board (CSLB), Department of Consumer Affairs)

   California Contractors State License Board (CSLB), Department of Consumer AffairsRegulatorPrimaryJurisdiction CALast checked August 31, 2026Updates: Revised periodically by CSLB; the fetched edition is marked Rev. 12/22ID cslb-license-bonds-fast-facts

   What this source supports (11)

   • 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.

   Downloaded 2026-08-31 and extracted with pdftotext, then read in full. publishedDate is month-only because the document states only Rev. 12/22; the earlier 2022-12-01 value invented a day. The guide's $10,000 small claims figure is quoted here as the guide's own wording and is flagged in the entry as superseded by Code of Civil Procedure section 116.221. The guide does not say the bond is insurance for the contractor, does not describe any reimbursement duty, and does not say CSLB declines to adjudicate bond claims. Published: 2022-12

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6. [6]

   40 U.S.C. 3131 - Bonds of contractors of public buildings or works (Miller Act)(opens the original record on Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov))

   Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)Primary lawPrimaryJurisdiction USLast checked August 31, 2026Updates: Amended by act of Congress; codified in title 40 chapter 31 subchapter IIIID usc-40-3131-miller-act

   What this source supports (8)

   • 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).

   Re-verified 2026-08-31 on the Office of the Law Revision Counsel site, the official publisher of the United States Code; the $100,000 figure in subsection (b) is confirmed as the current statutory threshold. The source URL was moved from the Cornell LII reproduction to uscode.house.gov in this revision. Two statutory branches that the earlier draft omitted are now on the card: subsection (d), the foreign-country waiver, and subsection (e), which preserves the contracting officer's authority to require bonds or other security beyond and outside subsection (b). An earlier version of this card also misquoted the payment bond rule as a written determination that a lesser amount is adequate; the statute says the awarding officer must determine, in a writing supported by specific findings, that a payment bond in the total-contract-price amount is impractical.

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7. [7]

   40 U.S.C. 3133 - Rights of persons furnishing labor or material (Miller Act payment bond claims)(opens the original record on Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov))

   Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)Primary lawPrimaryJurisdiction USLast checked September 6, 2026Updates: Amended only by legislation.ID usc-40-3133-miller-act-claims

   What this source supports (6)

   • 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.

   This is the section that decides whether an unpaid subcontractor or supplier actually recovers, and it is separate from section 3131, which only requires the bond to exist. Two deadlines do the work and they run from different events: the 90 day notice in subdivision (b)(2) runs from the claimant's own last labor or material and applies only to a claimant one tier removed from the prime, while the one year limitation runs from the same event and applies to everyone. The waiver rule in subdivision (c) is the counterpart worth reading before signing anything at the start of a job, because a waiver executed before the labor or material is furnished is void. Verified against the official Law Revision Counsel text; the Cornell rendering was read first and agrees. The one year limitation is attributed here to subdivision (b) rather than to a paragraph number, because the paragraph label was not rendered on the page as read.

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8. [8]

   FAR 28.102-1 - Performance and payment bonds and alternative payment protections for construction contracts, General(opens the original record on U.S. General Services Administration (Acquisition.gov, Federal Acquisition Regulation))

   U.S. General Services Administration (Acquisition.gov, Federal Acquisition Regulation)RegulatorPrimaryJurisdiction USLast checked August 31, 2026Updates: Updated by Federal Acquisition CircularsID far-28-102-1

   What this source supports (5)

   • 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.

   Re-fetched 2026-08-31 from acquisition.gov, the publisher's own site, and the paragraph (a) and (b)(1) text was read against the part 28 page as well. Three corrections were made in this revision. The waiver clause in paragraph (a), previously dropped for lack of quotable detail, is now carried with both of its branches, because stating the $150,000 requirement without it overstates the rule. The list of payment protections previously stopped at four and omitted the fifth, a deposit of the types of security listed in 28.204-1 and 28.204-2. The bracket wording now follows the FAR, which reads not greater than $150,000. The separate card entry about the 40 U.S.C. 3132 citation was folded into the paragraph (b)(1) entry, where that citation actually appears. The FAR text contains no inflation-adjustment language, so this source is not used for any assertion about thresholds moving.

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9. [9]

   California Civil Code section 2847 - Reimbursement of surety by principal(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked August 31, 2026Updates: Enacted 1872; amended only by act of the LegislatureID ca-civ-code-2847-surety-reimbursement

   What this source supports (3)

   • 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.

   Re-fetched 2026-08-31; the full text is short and was read verbatim. An inference about the reimbursement duty being statutory rather than merely contractual was removed from the claims array. The right is conditioned on the surety having satisfied the principal obligation and is expressly subject to the next section (Civil Code 2848). Published: 1872

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10. [10]

    13 CFR 115.10 - Definitions (SBA Surety Bond Guarantee Program)(opens the original record on Cornell Legal Information Institute (reproducing the Code of Federal Regulations))

    Cornell Legal Information Institute (reproducing the Code of Federal Regulations)Primary lawPrimaryJurisdiction USThird-party reproductionLast checked August 31, 2026Updates: Amended through the Federal Register as SBA revises part 115ID cfr-13-115-10-sba-definitions

    What this source supports (11)

    • 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.

    Re-fetched 2026-08-31 and read the definitions directly. The earlier draft flattened the bond-type branches in the Principal, Obligee, and Surety definitions and attributed a general-liability, property, and workers compensation allocation to this section; the section says nothing about those lines of insurance, and that attribution has been removed. The definitions are scoped to SBA part 115 and are used here only as a clear statement of the three roles and of what each bond type is conditioned on. The official eCFR copy at ecfr.gov redirects to unblock.federalregister.gov and could not be fetched, so the Cornell LII reproduction is used.

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11. [11]

    Surety bonds - Funding Programs(opens the original record on U.S. Small Business Administration)

    U.S. Small Business AdministrationRegulatorPrimaryJurisdiction USLast checked August 31, 2026Updates: Updated by SBA as program parameters change; contract limits are periodically adjustedID sba-surety-bond-guarantee-program

    What this source supports (5)

    • 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.

    Re-fetched 2026-08-31; the four bond categories, the 0.6 percent fee, the no-fee treatment of bid bond guarantees, and the $9 million and $14 million contract limits all appear on the page. A marketing line about bonds helping small businesses win contracts was dropped from this card because it was not re-verified. This is a program landing page and is not used for the three-party structure or the reimbursement duty.

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