Section 11.8 How the Bond Is Construed—General Principles

• Library: Insurance Practice 2015

Surety bonds are construed in accordance with the principles of contracts generally and “should be taken, understood and given effect in their plain, ordinary and popular sense.” United States Fid. & Guar. Co. v. Centropolis Bank of Kansas City, Mo., 17 F.2d 913, 918 (8^th Cir. 1927), 53 A.L.R. 295 (1928); 9 John A. Appleman & Jean Appleman, Insurance Law and Practice § 5274 (1981); 72 C.J.S. Principal and Surety § 82 (1987). Augusta Court Co-Owners’ Ass’n v. Levin, Roth & Kasner, P.C.,971 S.W.2d 119 (Tex. App. 1998), held that liability of a surety is determined by the language of the bond itself.

In accordance with the general rule regarding construction of contracts, an ambiguous clause in a surety bond will be construed against the party that prepared it—normally the surety...