How surety works

Traditional insurance protects the policyholder from losses due to accidents, natural events, or medical events. Surety bonds are different, because they are provided to the contractor or business, but protect the project owner or obligee.

Unlike traditional insurance, in which the insurer anticipates at least some claims, surety is underwritten with the expectation that a claim is highly unlikely.

Surety bonds typically fall into three categories.

Bond types

A contract surety bond guarantees to the owner of a construction project that the contractor will perform the work specified by the contract. Contractors are required to post surety bonds for all federal or state projects, and for most local public projects.


In general, commercial bonds ensure that businesses and professionals adhere to all codes and regulations, perform work as required by statute or contract, and faithfully fulfill their responsibilities.

Our commercial surety team also has expertise with nonconstruction contract and supply bonds, along with fidelity.  While fidelity bonds are a form of surety, the protection they provide acts more similarly to traditional insurance coverages, and guards against employee dishonesty.

This website is intended to be informational. Descriptions are provided only as a summary outline of the products and services available and are not intended to be comprehensive and do not constitute an offer to sell or a solicitation. The products and services described may not be available in all states or jurisdictions. See your policy, service contract, or program documentation for actual terms, conditions, and exclusions. Any inquiries regarding the subject matter set forth herein should be directed through licensed insurance professionals.

Coverage and insurance are provided and underwritten by Liberty Mutual Insurance Company or its affiliates or subsidiaries. When we offer insurance products, we will state clearly which insurer will underwrite the policy. Some policies may be placed with a surplus lines insurer. Surplus lines insurers generally do not participate in state guaranty funds and coverage may only be obtained through duly licensed surplus lines brokers.