Payment Bond — Why Contractors, Subs, and Suppliers Rely on It
A payment bond guarantees that everyone on the project—subcontractors, suppliers, and laborers—will be paid for the work and materials they provide.
Purpose of a payment bond:
To prevent mechanics liens and payment disputes that can stop a project mid-stream.
Why it’s helpful:
Ensures smooth operations on multi-layered projects
Builds trust with subcontractors and suppliers
Protects owners from lien exposure
Where it’s required:
Payment bonds typically accompany performance bonds on public and large private jobs. Federal projects always require them.
Bottom line:
Payment bonds keep the entire project supply chain running smoothly by guaranteeing fair payment for everyone involved.