Payment Bond

A labour & material payment bond is issued by the surety at the request of a contractor (principal) that must provide a labour & material payment bond when signing a new job contract. This bond provides security to sub-contractors and suppliers that they will be paid according to the terms of their contracts.

Owners request labour & material payment bonds because subcontactors and suppliers can provide better pricing on contracts with labour & material payment bonds as they eliminate the risk of non-payment.