Texas payment bonds are sureties taken out in the construction industry to ensure that contractors compensate their subcontractors, material suppliers, and laborers in a timely fashion. These bonds are usually obtained by contractors or subcontractors prior to the commencement of a construction project.
In Texas, payment bonds also ensure that payments comply with state and federal regulations. They offer legal recourse for subcontractors and suppliers. If a contractor has failed to pay subcontractors, suppliers and laborers can file a claim against the payment bond and be compensated accordingly.
Claims Against Payment Bonds
Of course, you should always avoid claims against your payment bonds. However, if you find you have trouble paying subcontractors and suppliers, contact your surety bond agent to ask questions and prepare for potential claims.
If someone does try to file a claim against your payment bonds, the supplier, contractor, or laborer must file a notice within a certain timeframe of the work being completed. If they fail to do this, then claim may be rejected outright. This timeframe varies between federal projects and other public projects.
When a successful claim is made, then the surety will compensate all claimants who were not paid by the contractor that obtained the bond. Payment bonds are a safety net to ensure everyone gets paid. Once the surety has paid the claimants, then the contractor must pay back the surety. Choose a surety bond company you trust to work with you in difficult situations!
How to Get Texas Payment Bonds
It’s simple to begin the process of getting your Texas payment bonds. First, use the form below to apply for a quote. Depending on the situation and the bond amount, you may need to submit additional documentation later. If you have any questions, please free to call us at 855.590.8550 and speak to our surety bond experts!
Texas payment bonds are often required along with performance bonds.
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