A payment bond is required on many construction projects, both private and federal. In the construction industry, the payment bond is usually issued along with a performance bond. The payment bond forms a three-way contract between the Owner, the contractor and the surety, to make sure that all sub-contractors, laborers, and material suppliers will be paid leaving the project lien free. A ‘payment only’ bond is rarely requested.
Payment Bond Terms
The Surety is the company licensed by the Insurance Department and the regulatory agencies to write bonds within the state of the country on which the work will be executed.
The Contractor also called the principal, promises in the payment bond that the contract will be executed according to the specified terms, while the Surety promises that if the contractor fails on the terms, it will pay damages to all demanding parties.
The Obligee is the entity that is requiring the contractor to get a bond.
BFbond.com has an easy application that can be filled out online, which will give the necessary information for the underwriter to know who you are and where you are coming from.
THAT’S IT! Easy as 1, 2, 3, our streamlined process will get you on the fast track to obtaining a Payment bond.
For more information about Payment Bonds visit us at www.bfbond.com or call us at 1.800.921.1008