A claimant recovers against the contractor's license bond and the surety pays. What may the surety then do?

Explanation

A surety bond is not insurance for the contractor: the surety guarantees the contractor's obligations to third parties, and on paying a claim it is entitled to indemnity from its principal, the contractor. §7071.11(e) requires the surety to notify the Registrar within 30 days of any payment, and §7071.11(f) gives the licensee at least 15 days to protest before the surety settles a claim in good faith. (a) reverses the beneficiary, who is the claimant rather than the surety's customer. (b) borrows the §7071.8 disciplinary-bond ceiling, which only the Registrar may impose. (c) describes an insurance policy, where premiums fund losses with no right of recovery against the insured.