Guide For Making A Claim Under A Surety Bond

How do Claims work?

As a resident of Canada, you should understand that surety bonds are put in place to protect you! If you feel that your service provider has wronged you, it is a good idea to consider filing a complaint under the surety bond. This is undoubtedly one of the best ways to seek reimbursement from your losses. Of course, the process of making a claim is unknown to many individuals. Below, you’ll learn how to make the claim, so you can seek reimbursement, without delay.

Refer to the video below for an example on how payment bond claims work.. you will get an idea of how generally claims work.

How It Works

In order to get a better understanding of surety claims, you should learn precisely how this process works. When the obligee feels the need to file a claim, they’ll make contact with the surety bond company like They’ll provide the company with the information needed and the surety will begin conducting an investigation. At this point, the outcome will be out of the hands of both the obligee and the principal. The end result will depend on the surety, their investigation and their opinion.surety bonding claims

If they agree with the obligee, they’ll immediately reimburse this individual or company. Then, they’ll turn to the principal and try to recover their own losses.

Potential Conditions

Although it will ultimately depend on the specific bond in question, there will be a few potential conditions, which much be met before you can file your claim. Below, you’ll find a breakdown of the three most common.


  • The obligee will need to formally declare the principal to be in default according to the terms and conditions of the original contract.
  • The above information must be accurate and the principal must actually be in default.
  • The obligee should have fulfilled their requirements and commitments as set forth in the contract.


Surety’s Choices

Once the surety has acquired and confirmed the above information, they’ll need to make a choice in regards to the outcome. Generally, the surety will be able to choose between four courses of action. The four possible outcomes will be listed below.


  • Payout – In many situations, the surety will opt to pay the obligee to end the claim. With this solution, the obligee will receive the amount of the bond or the amount needed to complete the project.
  • Setup Completion – The surety may also decide to arrange for the project to be completed. In this type of situation, the surety will remove the principal from their duties and will replace them with a more capable company.
  • Remedy – Or, the surety may opt to try and remedy the situation. If this happens, they’ll mediate between both parties and will attempt to convince the obligee to drop their complaint, while forcing the principal to continue and complete the project.
  • Complete – The surety also has the right to take over the project. They can enter into a contract with the obligee and assume the contractor’s original responsibilities.


Documents To Submit

If you wish to file a bond claim, there will be an array of documents that you’ll need. First and foremost, you’ll need a copy of the contract, as well as copies of change orders and progress billings. Usually, you will also need to write down your complaints and submit the written argument along with the other documents.

claim form for insurance

When A Surety Will Not Respond To A Claim

As a customer, it is important for you to understand that there are certain cases in which a surety company may not approve your claim. For instance, if proper research has been done and there has been no factual evidence that the principal broke his or her agreement, the surety company will not grant your claim.

Another situation, in which a surety will respond to your claim, is if you are requesting the contractor to do certain work that he or she feels is not in scope of the contract, even though you may feel differently. This is oftentimes something that can be resolved between the principal and the obligee. If the two parties cannot solve the issue, then it can be taken into the court system.