Are there laws that mandate the use of surety bonds?
For contractors, certain federal public works projects require a surety bond. The Miller Act of 1935 remains the federal standard for mandating surety bonds on federal public works projects. Bonds are required for all contracts worth more than $100,000, and payment protection is mandatory for those in excess of $25,000. Most states have passed similar laws requiring risk mitigation and bonding for public projects. Most states and local municipalities have enacted similar pieces of legislation that require contractors to obtain surety bonds for public projects above a certain cost. Private developers and companies may also require contractors and subcontractors to obtain bonds.
