Construction surety bonds serve a multitude of purposes, from reinforcing building standards to ensuring payments are made in full in regards to a specified contract.

While it is true there are a variety of reasons for specific surety bonds, it is not widely known that some surety bonds are actually put in place to benefit the environment when it comes to construction contracts and bonds.

Below are some of the commonly overlooked construction surety bonds aimed at environmental integrity.

Construction Surety Bonds: Closure & Post Closure Bonds

Surety bonds are at times the foremost principals in ensuring certain federal regulations are enforced for the safety of the environment.

In the United States, municipal solid waste landfill owners are required by the U.S. Environmental Protection Agency to secure closure and post-closure Surety bonds as means of ensuring the proper care and long term financial planning of said landfills to uphold the care and health of the environment.

These Surety bonds can also be applied to well drilling operations.

The state of Ohio, for example, requires Closure/ Post Closure bonds to ensure each and every hole that is dug for well drilling is sealed and covered permanently after construction efforts have yielded. These bonds help to ensure the environment is impacted as little as possible when it comes to large construction projects.

Construction Surety Bonds: Oil Disposal Bonds

In another example of Surety bonds aimed at the protection of the environment, some states such as Iowa have established bonds requiring the proper disposal of oil and tires.

Although the terms of which these bonds abide may vary from state to state, they all fall under the umbrella of license and permit bonds. These bonds must be approved and filed by the state before individuals are allowed to legally dispose of either oil or tires in this situation.

For a more specific example of how these bonds work, the Colorado Department of Public Health requires a $10,000 Surety bond to be filed before a company or individual is allowed to transport water grease. The bond, in this case, ensures the financial assurance for cleanup in the event of a spill or accident.

In conclusion, there are a variety of surety bonds established to ensure the proper protection of our fragile environment.

From bid bonds and performance bonds to labor/material bonds and supply bonds, these financial contracts act as the first line of defense in the benefit of the environment in regards to large construction projects.

Greg Rynerson, CPCU

Greg Rynerson, CPCU

Backed by 30 years of experience, I spent my career in the surety bond and insurance industries. Throughout the course of my professional life, I've been proud to execute bonds at the state and federal level for various clients.

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