Several factors are involved in considering a surety bond for construction businesses, including whether the business will:
- Undertake publicly funded projects (government entities commonly require a bond)
- Work on projects that third-party lenders finance (lenders usually require assurance that a project will be completed as promised)
A business should also consider whether it will subcontract specialty work. If so, it remains answerable to the property owner for all work. Therefore, it should consider if the subcontractors should have surety bonds to ensure the proper and timely completion of work and, thereby, to help manage the contractor's risk.