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Payment bonds are a type of contractor bond that protects certain laborers, material suppliers and subcontractors against nonpayment. Generally issued together with performance bonds, payment bonds guarantee that upon completion of a building project a contractor will pay certain bills for labor and materials (including those from subcontractors and suppliers) which are associated with a building contract.
A construction payment bond is generally purchased by a contractor during the bidding or negotiation phase of a construction job, and is submitted by the contractor to the owner of the project once he or she has been awarded the job. Most payment bonds specify on time and full payment to employees, suppliers, subcontractors, and others creditors. This guarantees that all suppliers and contract employees working on a construction project will be paid and won’t walk out halfway through the job.
If there is a claim on a payment bond due to nonpayment or other breech of contract, the wronged party can file a claim on the bond. If the claim is found to be valid, the surety company that issued the bond backs up the guarantee of payment to the financial limit of the payment bond.
CSIA is your full service source for all contractor’s license bond options, including contract bonds, payment bonds, performance bonds, and bid bonds. We have more than 30 years of experience not only issuing payment bonds, but also fighting unjust claims on behalf of contractors. There are currently more than 50,000 satisfied clients with bonds from CSIA – by far the highest number of any agency on the West Coast.
Fill out our payment bond application today and receive a firm payment bonds quote in as little as 24 hours. For more information, or if you have any questions at all, please do not hesitate to call us toll free at 1-800-675-2000. Our hours are 7:00 AM to 7:00 PM Monday through Thursday, and 7:00 AM to 5:00 PM on Fridays.