Guide · Insurance

Surety Bonds and Construction Payment Security: A Comprehensive Guide to Payment Bonds, Performance Bonds, Miller Act Claims, and Indemnity

31 U.S.C. § 9304

Type
Guide
Jurisdiction
National
Date
2025-09-20
Topic
Insurance

This guide covers surety bonds and construction payment security for construction lawyers, contractors, sureties, and public owners. Part 1 distinguishes suretyship from insurance. Part 2 covers bond types and underwriting. Part 3 covers the Miller Act framework. Part 4 covers tier analysis and who is protected. Part 5 covers the notice and limitations deadlines. Part 6 covers recoverable amounts. Parts 7 through 15 cover Little Miller Acts, performance bond default, the indemnity agreement, subrogation and retainage priority, surety defenses, bad faith, litigation, private project alternatives, and practice guidance.

Surety Bonds and Construction Payment Security: A Comprehensive Guide to Payment Bonds, Performance Bonds, Miller Act Claims, and Indemnity

Insurance > Surety Bonds and Construction Payment Security | Published 20 September 2025 - Updated 2 August 2026 | UpLaw - uplaw.us

Part 1 — Suretyship Is Not Insurance

Insurance Suretyship
Parties two three — principal, obligee, surety
Economics risk transfer credit substitution
Premium priced for expected losses a fee for the surety's credit
After payment loss absorbed reimbursement expected in full
Underwriting actuarial credit analysis
Target loss ratio positive zero
Key collateral document none general indemnity agreement
Defenses policy terms policy terms plus the principal's defenses

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