Surety bonds

Many individual contractors are "bonded" in the sense that the quantity and quality of the work they do is guaranteed by a "surety bond." In the words of the U.S. Small Business Administration, "A surety bond is a three-party instrument between a surety, the contractor and the project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed."