Alabama Bond Claim

The general principle in Alabama is that there is no requirement for a bond to be procured on a private commercial project. However, since Alabama does not permit the filing of mechanics liens on public land, bid, performance and payment bonds are usually required when a project is public in nature.

[What Does an Alabama Bond Claim Do?]

[What Types of Alabama Bonds Exist?]

[Who Can File an Alabama Bond Claim?]

[Is There a Time Limit In Which an Alabama Bond Claim Must Be Filed?]

What Does an Alabama Bond Claim Do? 

The Alabama bond claim allows a beneficiary of a bond to make a claim for monies due on a construction project. The liability of a surety on the bond is joint with that of the principal on the underlying obligation. In short: a bond is obtained on a construction project to act as insurance for subcontractors and suppliers.  The idea is that when a subcontractor or supplier is not paid on a project, they have a right to make a claim against the bond for payment.  

Filing an Alabama bond claim obligates the surety and the principal on the bond to pay amounts that are legitimately owing.  Alabama even requires that successful claimants be awarded reasonable attorneys fees incurred in prosecuting the claim against the bond.

What Types of Alabama Bonds Exist? 

Three types of bonds exist on public projects: bid bonds, performance bonds, and payment bonds. Bid bonds are submitted with a contractor's bid during the bidding phase of a public project: the bid bond does not provide a benefit to anyone working on the project - it is for the owner's benefit only.  Performance bonds ensure that the project will be completed by the contractor, or that the surety issuing the bond will take over the project in the event of the contractor's default. The performance bond is also generally only beneficial t the owner.  For those who perform work on a public construction project in Alabama, the only bond that under which they can make a claim is a payment bond.  On public projects of $50,000.00 or more, Alabama law reuqires prime contractors to furnish a payment bond in an amount not less than 50 percent of the contract price.  

Alabama payment bond claims are available on most public projects over $50,000.00, and on private projects where the owner requires them.