What might lead to the cancellation of a surety bond?

The cancellation of a surety bond can indeed be prompted by the failure to meet terms or conditions, or lack of payment. Surety bonds are designed to ensure that the principal (the entity obtaining the bond) adheres to specific contractual obligations. If the principal does not fulfill these obligations, whether through non-compliance with the contract terms or failure to make required payments, the surety has grounds to cancel the bond. This ensures that the surety is not financially liable for defaults that stem from the principal’s inability to uphold their end of the agreement.

While excessive claims made against a bond, change of ownership, or increased financial risk could be important factors in bond management and assessment, they do not directly lead to the cancellation of the bond itself as clearly as a failure to meet the conditions of the bond. In essence, the surety has a vested interest in the principal's ability to perform as promised, and a breach of these terms is a critical issue that warrants cancellation.