What is a primary function of the surety?

The primary function of a surety is to guarantee that the obligated party will fulfill their contractual obligations. This means that if the principal (the party who is contracted to perform) fails to meet their responsibilities, the surety company steps in to ensure that the project is completed or that any associated financial obligations are met. This guarantee provides assurance to the project owner or obligee that their interests are protected.

By assuming this risk, the surety allows projects to proceed with more confidence, knowing there is a financial backing that ensures obligations are fulfilled even in the face of potential default. This fundamental role distinguishes the surety from other entities involved in construction or contractual agreements, solidifying the surety's importance in construction and service contracts.