What a payment bond claim is and when you file one
A payment bond claim is a formal demand for money owed to you by a contractor or subcontractor who worked on a construction project. You file it when the person or company that hired you has not paid, and you want to recover the debt from the payment bond—a type of insurance that protects workers and suppliers on construction jobs.
Payment bonds are required on most public construction projects (government-funded work) and many private ones. The bond is held by a surety company, which guarantees that if the contractor fails to pay, the surety will pay you instead. Filing a claim is how you trigger that may provide.
You can file a payment bond claim if you are a subcontractor, laborer, equipment supplier, or material supplier who worked on or supplied goods to a construction project and did not receive full payment. The claim must be filed within a specific deadline—usually 90 days from your last day of work or delivery, though this varies by state and by the bond terms.
Key Takeaways
- Payment bond claims must be filed within 90 days of your last work or delivery on the project, though some states and bonds allow up to one year.
- You need the project name, the contractor's name, the surety company name, your invoice or contract, and proof of non-payment to file a claim.
- Most claims are filed in writing to the surety company, not to the contractor, and the surety has 30 to 45 days to investigate and respond.
- If the surety denies your claim, you can pursue a lawsuit against the bond, but you must act before the deadline expires or you lose the right to recover.
Find the surety company and bond information
Before you can file a claim, you need to identify which surety company holds the payment bond. On public projects, this information is public record. Contact the project owner (the government agency or public entity that hired the contractor) and ask for the payment bond number and surety name. You can also ask the general contractor or project manager directly.
On private projects, the surety information may be harder to find. Check your contract with the contractor—it may list the bond details. If not, contact the contractor and ask for the surety company name and bond number. If the contractor refuses or cannot provide it, you may still have a claim, but you will need to research which surety issued the bond or file a lien instead.
Once you have the surety name, locate their claims department. Most surety companies have a website with a claims section and a phone number. Write down the surety's address and the name of the claims contact if available.
Gather the documents you will need
Prepare your claim file before you contact the surety. You will need proof that you performed work or supplied materials, proof that you were not paid in full, and documentation of the project itself.
Collect these documents:
- Your invoice or invoices showing the work performed or materials supplied, the amount owed, and the date of each invoice.
- Your contract with the contractor, or a purchase order, or a written agreement showing the scope of work and price.
- Proof of delivery or completion—photos, delivery receipts, timesheets, or a signed statement from the project manager confirming you finished the work.
- Proof of non-payment—bank statements showing no deposit from the contractor, or a written statement from the contractor saying they cannot pay.
- The project name, location, and the general contractor's name.
- The payment bond number and surety company name.
- Your business name, address, phone number, and email.
If you have email exchanges with the contractor about payment, include those. If you sent a demand letter asking for payment before filing the claim, include that too—it shows you gave the contractor a chance to pay.
File your claim in writing with the surety
Contact the surety company's claims department by phone first to confirm the correct mailing address and the name of the claims adjuster handling your bond. Ask whether they accept claims by email or require paper mail. Some surety companies have an online claims portal where you can upload documents directly.
Write a formal claim letter. It does not need to be long, but it must be clear and include all the facts. Address it to the surety company's claims department and include:
- Your name, business name, and contact information.
- The project name and location.
- The general contractor's name.
- The payment bond number.
- The date you last worked on or supplied materials to the project.
- The total amount owed to you.
- A brief description of the work you performed or materials you supplied.
- A statement that you have not been paid in full.
- A request for payment from the bond.
Attach copies (not originals) of your invoice, contract, proof of delivery, and proof of non-payment. Send the claim by certified mail with return receipt requested, or by email if the surety accepts it. Keep a copy for your records and note the date you sent it.
Understand the surety's timeline and response
After you file, the surety company has a set amount of time to investigate and respond. In most states, this is 30 to 45 days. During this time, the surety will contact the contractor to verify whether you actually performed the work and whether the amount you claim is correct.
The surety may ask you for additional documents or clarification. Respond promptly to any requests. If you do not respond, the surety may deny your claim.
The surety will send you a written response. They may approve your claim and issue payment, deny it, or offer a partial payment. If they approve it, payment usually comes within 10 to 20 business days. If they deny it, they must explain why in writing.
What to do if the surety denies your claim
If the surety denies your claim, you have options. First, review the denial letter carefully. The surety must state the reason—for example, they may say you did not file within the deadline, or that the contractor disputes the amount owed, or that the bond does not cover your type of work.
If you believe the denial is wrong, you can appeal. Write a letter to the surety explaining why their reason is incorrect and provide additional evidence if you have it. Some surety companies will reconsider if you present new information.
If the surety will not reconsider, you can file a lawsuit against the bond. This means suing the surety company in court to recover the money. You must file the lawsuit before the deadline expires—usually within one year of your last work, though this varies by state. Consult a construction attorney before filing a lawsuit, because the rules are complex and missing a deadline can cost you the right to recover.
Frequently Asked Questions
What if I do not know the bond number or surety company name?
Contact the project owner or general contractor and ask for the bond information. If they will not provide it, you can file a lien on the property instead, which is a legal claim against the building itself. A construction attorney can help you determine which route is faster in your state.
Can I file a claim if the contractor is still working on the project?
Yes. You do not have to wait until the project is finished. File as soon as you are not paid for work you have completed. The deadline still runs from your last day of work, so filing early protects you.
How much does it cost to file a payment bond claim?
Filing a claim with the surety is free. If you hire an attorney to help you file or to sue the surety, you will pay attorney fees, which vary by location and complexity. Many construction attorneys work on contingency, meaning they take a percentage of what you recover instead of charging an upfront fee.
What if the surety company goes out of business?
The surety's state regulator (usually the Department of Insurance) maintains a fund to pay claims against failed surety companies. Contact your state's insurance commissioner's office if the surety is insolvent. You may still recover, but the process is slower.
Can I file a claim if I was paid late instead of not paid at all?
Payment bond claims are typically for non-payment or partial non-payment. If you were paid late but eventually received the full amount, you generally cannot file a claim. However, if you were paid less than the amount owed, you can file for the unpaid balance.