Payment Bonds

A payment bond is a type of surety bond that guarantees subcontractors, suppliers, and workers will receive payment for their work or materials supplied on a construction project. If the contractor fails to pay them, the bond ensures a surety company (the bond issuer) covers those payments. This provides financial security for everyone involved, helps prevent disputes or delays, and encourages good-faith performance by contractors. Essentially, it serves as a safety net that protects parties from financial loss due to non-payment on a construction project.