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Construction payment bonds can be used during any construction or capital improvement project; but they’re most common in construction projects that involve city, state, or federal funding. Public works projects generally require the prime contractor to obtain a payment bond guaranteeing that each and every entity providing services, labor, materials, or equipment to the project is paid on time.

What is a Construction Payment Bond?

A payment bond is a guarantee; a guarantee from the bonding company that every entity or person providing labor, materials, or equipment to a construction project is paid. When an individual on a bonded project is not paid, that individual has the right to obtain payment from the bonding company that issued the bond. This is true regardless of who you entered into an agreement with, and whether or not you are a subcontractor, a vendor, or a material and equipment supplier. If you provided services to a bonded project, you can receive payment directly from the bonding company for sums rightfully due to you.

Federal Projects

Thanks to the Miller Act, prime contractors must secure a payment bond on government contracts exceeding $100,000. That means that nearly all public works projects have a payment bond.

City and State Projects

Just like Federal Projects, nearly all State and City construction projects have a payment bond protecting all of the entities providing labor, equipment, and materials to the project.

Private Projects

While not required on private construction projects, payment bonds are becoming more-and-more common due to their effectiveness. Often times the owner of a private project will require the prime contractor to obtain a payment bond covering the project. This allows the project owner to not only protect itself from claims and liens, but to also protect all of the subcontractors and suppliers on the project.

File a Bond Claim with Construction Disputes

Don’t be intimidated by payment bond rules, laws, and regulations, we’ve got you covered. You provide some key project information and we take care of the rest.

If you are owed money on a bonded construction project, the most cost efficient and effective way to receive payment for the past due sum is to file a bond claim here. If you do not know the name of the bonding company that issued the payment bond, we take care of that for you here.