District of Columbia Code Division VIII. General Laws. § 47-2853. e. Recovery on bond.

(a)(1) If a commercial or residential contractor who elected to hold a continuous bond pursuant to § 47-2853.78d(b) fails to satisfy a judgment awarded by a court of competent jurisdiction in the District for improper or dishonest conduct, the judgment creditor shall have a claim against the surety bond for such damages.  In order to recover the amount of any unpaid judgment, up to but not exceeding the maximum liability fixed by the Board, the judgment creditor shall meet the eligibility requirements of § 47-2853.78g(b)(1) through (5) and shall bring suit directly on the surety bond no later than 12 months after the judgment becomes final.

(2) The liability of such surety shall be limited to actual monetary loss, court costs, and attorney fees assessed against the contractor as part of the underlying judgment.  The liability of such surety shall not include any sums representing interest or punitive damages assessed against the contractor.

(3) The corporate surety shall notify the Board when a claim is made against a contractor's bond, when a claim is paid, and when the bond is cancelled.  Such notification shall include the amount of the claim and the circumstances surrounding the claim.  Notification of cancellation shall include the effective date and reason for the cancellation.  The bond may be cancelled as to future liability by the contractor's surety upon 30 days' notice to the Board.