A Payment Bond is for the benefit of all Subcontractors, Material Suppliers, Architects, Engineers, and Laborers who provide “public work labor” and “public work materials” to a publicly owned Property by and through a public work contract.
Definition
Public Work Labor: Means any labor used to carry out work on a public Project.
Definition
Public Work Materials: Means material used, or “ordered and delivered for use,” “specially fabricated materials” (meaning materials that are reasonably unsuitable for another Project), equipment rental and repair fees, power, water, fuel, and lubricants actually used, or “ordered and delivered for use” to carry out public work.
The one who purchases the Payment Bond is referred to as the “Principal.” This is typically the General Contractor/Prime Contractor. The Payment Bond is purchased from an insurance company, referred to as the “Surety.” The Subcontractors, Material Suppliers, Architects, Engineers, and Laborers of whom the Payment Bond was purchased to protect, are referred to as the “Payment Bond Beneficiaries.
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