When a GC defaults/goes bankrupt and the actual project cost is higher than the amount the project is covered for, what does the surety pay? The actual cost or the coverage amount?
I assume a surety bond works somewhat like insurance and that if the project is covered for $500k but the actual cost is $750k, the surety will only pay $500k and the owner will have to come up with the remaining $250k. Does anyone know if that is correct? I never even heard the word surety until I began studying for CE.
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