A bond claim is a formal request for payment made against a construction bond when a contractor or project owner fails to meet the terms of a contract.
This process gives subcontractors, suppliers, and other stakeholders a financial safeguard when work has been completed but payment remains outstanding.
Understanding what a bond claim is helps contractors and subcontractors safeguard their rights to payment in complex construction environments.
How to File a Claim on a Surety Bond
Filing a bond claim involves several procedural steps that depend on local laws and the specific type of project.
The process usually starts with a written notice to the parties involved—typically the general contractor, project owner, and the surety bond company that issued the bond. This notice outlines the unpaid amount and provides supporting documentation, such as contracts and invoices.
Once the surety receives the notice, it reviews the claim to determine whether it meets the bond’s conditions. If the surety confirms that the contractor failed to perform or pay as required, it compensates the claimant and later seeks reimbursement from the contractor. When documentation or timing requirements are not met, the claim can be denied.
Timeliness is critical. Most states require that claims be submitted within a few months after the last delivery of labor or materials. Failure to follow these deadlines may forfeit the right to recover payment under the bond.
Payment Bond: Meaning and Purpose
It is designed to protect subcontractors and suppliers by guaranteeing they receive payment for labor and materials used on a construction project.
These bonds are required for most public works under federal and state “Little Miller Acts,” which prohibit placing liens on public property.
Instead of filing a lien, unpaid parties may pursue the payment of the bond as a legal route to recover what they are owed. This process provides a faster and more reliable form of compensation than property-based claims.
In parallel, a Performance Bond ensures the project’s completion if the contractor defaults. Both bond types serve different purposes but work together to ensure that construction projects are completed according to plan and that payments flow as intended.
Preventing Bond Claims
The most effective way to avoid a bond claim is to comply fully with the bond’s conditions.
Contractors should maintain organized records, including signed contracts, payment receipts, delivery logs, and correspondence. Detailed documentation helps demonstrate that obligations were met and provides critical evidence in case of a dispute.
Clear communication among all parties—contractors, subcontractors, and suppliers—reduces misunderstandings that often lead to claims.
Consulting with the company before, during, and after the project can also help identify and correct issues early.
Common Mistakes When Filing a Bond Claim
Even experienced contractors and suppliers can lose their right to payment if they make procedural errors during the bond claim process. Understanding these common mistakes helps prevent costly delays or claim denials.
Missing Deadlines
Each state has strict timelines for filing a bond claim. Missing these deadlines, even by a single day, can void the claim entirely. Always verify the specific deadlines under the applicable state’s Little Miller Act.
Incomplete Documentation
Sureties rely on clear evidence to validate claims. Missing invoices, unsigned contracts, or vague payment records can delay the investigation. Keeping organized and detailed documentation from the start of the project is critical.
Incorrectly Serving Notice
Filing a claim doesn’t mean submitting it to a court; instead, it must be properly delivered to the parties designated by law, usually the surety company, the general contractor, and the project owner.
Sending the notice to the wrong entity or through the wrong method (such as regular mail instead of certified delivery) can invalidate the claim.
Assuming Private Projects Qualify
Many businesses confuse public and private projects. The Payment Bond requirement applies primarily to public contracts. Private projects may not be covered under the same protections, so parties should confirm the bond’s existence before starting work.
Not Following Up After Filing
Filing is only the beginning. If the surety requests more information, claimants must respond promptly. Delays or lack of cooperation can stall or jeopardize the process.
The Role of Bond Claims in Ensuring Accountability
A bond claim represents a structured legal mechanism that helps maintain accountability and financial integrity in construction projects.
It ensures that when contractual disputes or payment delays occur, there is a formal process for resolution. Knowing how to file a claim, meet legal deadlines, and communicate effectively with the surety prevents unnecessary losses and strengthens business reliability.
At Avla, we understand how complex a bond claim can be. Our specialists guide you through the process to ensure compliance and financial protection. Contact us today!
