Do Something! Labour And Material Payment Bonds Should Be Disclosed To Claimants

Labour and Material Payment ("L&M") Bonds are commonly issued in the construction industry to ensure that subcontractors and suppliers working on construction projects get paid. L&M bonds also protect the "obligee", as named in the bond, from work stoppages and liens being registered. Basically, these bonds contain enforceable promises by a third party, the "surety", to pay subcontractors and suppliers (who fall within the definition of "claimant" as set out in the bond) for their work, provided any claim for payment advanced satisfies the express conditions of the bond (which include express time requirements for making a claim). If unpaid, a claimant can sue on the bond to receive payment from the surety.