A job that is covered by a surety bond really has two owners of that job’s contract, the insurance company and the contractor. If the contractor drops the job for whatever reason, the insurance company, or the surety bond writer, then owns the contract. The issuer of the contract can sue the surety bonds for the full price of the contract and whatever else he wants if the contractor was negligent. That is one of the provisions of a surety bond.
The writer of the surety bond, is acting as guarantor of the contractor’s character and workmanship, If he failed to properly screen the contractor before writing out a policy guaranteeing his execution of the contract, then the surety bond must make good on the contract in whatever way he can.