What is a Co Surety?
A co-surety is when there is more than a single surety on a project. Normally, when we discuss our different surety bonds, we refer to a single surety. In the current environment, this is the standard case. A large insurance company, like Zurich or AIG, will serve as the single surety on a contract bond.
However, this was not always the case. In many bonds in the past, an Obligor would get more than one person to provide the guarantee, so a co-surety arrangement would be made. Let’s look at an example, like in the movie “Chisum” with John Wayne. In this movie, Chisum and another landowner (Henry Tunstall) decided to start their own general store. The storeowner would have went out and gotten a contract for the delivery of goods, with Chisum and being the co-surety on the transaction. Thus, the provider of goods would first look to the store, but if they couldn’t pay, then Chisum or Tunstall would provide the assurance of payment.