The primary purpose of a payment bond is to ensure that all parties involved on a construction project receive timely payment for their work and materials. Payment bonds are often required on federal and state public projects and are sometimes required on private construction projects as well.
The payment bond functions as a three-party contract involving the principal (the general contractor), the obligee (the project owner or entity requiring the bond), and the surety (the bonding company). If a subcontractor, supplier, or laborer on a construction project is not paid as agreed, they have the option to make a claim against the payment bond. The surety company, which issued the bond, is then responsible for investigating the claim and compensating the claimant for the amount owed, up to the bond's coverage limit.
It’s important to get a copy of the payment bond on public projects before you start work to protect your right to payment in case of payment issues.
How to get a copy of the payment bond
You can simply request a copy of the payment bond from the general contractor or the public entity commissioning the work. Whether you are working on a state or federal project, the procedures for requesting a copy may be slightly different.
State project procedures
The procedure for requesting a copy of payment bonds may slightly vary depending on your state. However, a formal written request to your customer, the GC, and/or the surety will usually work. Written requests should be sent by certified mail or certified mail with return receipt requested. Before sending a written request, check your state’s statute regarding the mailing requirements as some states might require you to provide a notarized affidavit affirming that you are furnishing the project.
Federal project procedures
If you’re working on a federally funded project, there’s another option: you can send a Freedom of Information Act request. Under the Freedom of Information Act, you have the right to request and access federal agency records or information.
If you have more questions about requesting a payment bond, please reach out to our team and we’d be happy to help!