What is a Surety Bond & Who can get them?

In the UK construction industry, risk is a constant companion – whether you’re a main contractor, sub-contractor, developer or funding partner. Employers want assurance that projects will be completed. Contractors want to demonstrate reliability and win more work. Funders want security that their investment is protected.

This is where surety bonds play a pivotal role. 

A surety bond is not insurance in the traditional sense – it’s a three-party financial guarantee that protects a project and ensures contractual obligations are fulfilled. It is useful to think of it as a credit-backed promise that reinforces trust in a project. For many within construction, understanding how bonds work and who can obtain them is essential for tendering, compliance, and maintaining a strong reputation in the market.

The bond itself is issued by an insurance company or bank (usually via a specialist surety broker such as DRS) that promises the employer or project owner that the contractor will meet their contractual obligations. If the contractor fails to perform, the bond can be called up to the value of the bond (typically 10% of the initial contract sum).

Unlike insurance, surety bonds are underwritten like credit. The bond provider expects the contractor to perform and expects no losses. If a bond provider pays out under a bond claim, they have the legal right to seek recovery from the contractor.

Contrary to common belief, surety bonds are not just for large contractors. Many SMEs successfully obtain them every day. What matters is the contractor’s financial stability, track record and ability to deliver work.

As a specialist surety broker, we help contractors of all sizes secure the bonds they need quickly, competitively, and with expert guidance at every step. 

If you need support with surety bonds, please get in touch and we will be happy to help.