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Good Public Policy

Requiring surety bonds for public construction projects is good public policy. Surety bonds are a vital risk management tool that saves taxpayer money, protects taxpayer investments and gets public construction projects done right.

Surety companies ensure general contractors have the capabilities, expertise and financial strength to complete a project. Surety also provides financial security to suppliers, subcontractors and workers – making sure they get paid even if a general contractor defaults.

Surety is synonymous with responsible project management and good stewardship of the public interest.

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  • Surety Basics
  • Benefits of Surety
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Learn the basics of surety bonds

A surety bond for a public construction project is a three-party written agreement under which the surety guarantees a government agency that a general contractor will execute work according to contract terms.

Government agencies require contractors purchase surety bonds to ensure project completion and to avoid the risk of default and project delays.

For more in-depth information about surety bonds, visit our Surety 101 page.

Surety Protects Taxpayers, Improves Cost Efficiency

Surety bonds deliver exceptional value for public construction projects: reducing costs, protecting local businesses and improving efficiency.

Here’s are just a few examples of surety’s value:

  • Default protection: Unbonded public construction projects are more likely to default than surety bonded projects – perhaps by 10 times.
  • Lower cost of completion: And when defaults occur, unbonded projects cost 85% more to complete and take nearly twice as long to complete compared to bonded projects.
  • Value outweighs cost: According to economic analysis by EY, the overall value of surety bonds more than covers their costs across a bonded portfolio of construction projects.
  • Improved contractor pricing: Three-in-four developers surveyed by EY reported surety bonding reduces contractor pricing thanks to greater project certainty.
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News & Events

EY Report: Surety Bonding Provides Strong Economic Value and Strengthens Performance for Public and Private Construction Projects

November 17, 2022
A new study released today, The Economic Value of Surety Bonds, finds public and private construction projects protected by surety have lower rates of contractor default, lower cost of completion in the case of default, and are finished faster than non-bonded projects.
https://surety.org/wp-content/uploads/2021/07/SFAA-Logo-FullColor-RGB.png 0 0 SFAA https://surety.org/wp-content/uploads/2021/07/SFAA-Logo-FullColor-RGB.png SFAA2022-11-17 13:23:532022-11-28 17:19:46EY Report: Surety Bonding Provides Strong Economic Value and Strengthens Performance for Public and Private Construction Projects

The Surety & Fidelity Association of America Foundation Awards 15 Students With $5,000 Scholarship

October 19, 2022
The Surety & Fidelity Association of America Foundation (SFAA Foundation) announced today the 15 students selected as recipients of a $5,000 scholarship as part of the Surety and Fidelity Intern and Scholarship Program for 2022.
https://surety.org/wp-content/uploads/2021/07/SFAA-Logo-FullColor-RGB.png 0 0 Brian Muhlbach https://surety.org/wp-content/uploads/2021/07/SFAA-Logo-FullColor-RGB.png Brian Muhlbach2022-10-19 13:39:442022-11-28 17:17:59The Surety & Fidelity Association of America Foundation Awards 15 Students With $5,000 Scholarship

SFAA Receives Prestigious 2022 ASAE Silver ‘Power of Associations’ Award for Federal Advocacy Campaign

October 14, 2022
The Surety & Fidelity Association of America (SFAA), a nonprofit, nonpartisan trade association representing all segments of the surety and fidelity industry, won the prestigious ASAE Silver Power of Associations Award for their TIFIA-Bonding Advocacy Campaign.
https://surety.org/wp-content/uploads/2021/07/SFAA-Logo-FullColor-RGB.png 0 0 Brian Muhlbach https://surety.org/wp-content/uploads/2021/07/SFAA-Logo-FullColor-RGB.png Brian Muhlbach2022-10-14 13:30:292022-11-28 17:18:26SFAA Receives Prestigious 2022 ASAE Silver ‘Power of Associations’ Award for Federal Advocacy Campaign
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