I love the start of Craig Martin’s article – Compliance is Key – Proving Your Bond Claim – on his Construction Contractor Advisor blog: “Bonding companies can make it difficult to pursue your claim.”
The statement is unfortunate, but true. Whether the difficulty is created by design or if standard bureaucratic disorganization is to blame, the fact is that making a bond claim is a process, and there are certain best practices or tips that can help you get through the process.
Tip 1: Comply With Bond Terms When Submitting Your Bond Claim, And Send To The Surety
The first tip here starts with the process of initiating your bond claim. Procedures differ from state-to-state and bond-to-bond, but generally speaking you initiate the bond claim process by submitting a notice of your claim to the general contractor (or the contractor who secured the bond).
The first thing you need to do when filing your bond claim is to submit notice of your claim in accordance with statutory requirements and in accordance with the terms of the bond itself. We wrote about this previously in the article: Good Practice: Get A Copy Of The Payment Bond On State Projects.
The second thing you want to do is send a copy of your claim to the actual surety. A lot of claim procedures and statutes require only that you notify the contractor who secures the bond. Nevertheless, it is much more effective if you notify the surety company directly. Read about this here: Tip: Send Your Bond Claim to the Surety for Maximum Attention.
Tip 2: Followup with Bonding Company
In the article I wrote a few months ago titled “What To Do After You File A Bond Claim” I enumerate 4 steps. They can all be summed up as follows: follow up, follow up, follow up.
As Mr. Martin stated in the beginning of his blog article, “bonding companies can make it difficult to pursue your claim.” A lot of the times, they do this simply by dragging their feet. The longer they drag their feet, the more likely that you miss a statutory deadline, something comes up to defeat your claim or the parties just work it out through settlement.
Prevent this delay by following up with the bonding company. Call them, write them, email them, etc. Just follow up and check on the claim’s status frequently.
Tip 3: Have Your Act (and Backup Materials) Together
Whenever the bonding company does respond to you or address your bond claim you can be certain they will ask for this: more information. They will want correspondence, invoices, contracts, change orders, etc. Absolutely everything that has anything to do with your contract and payment dispute wil be ordered, and you’ll be required to provide it in order to finalize your bond claim.
Accordingly, if you want to be successful in your claim and resolve the thing quickly, have your act together and have all of your backup materials put together and ready to produce. The more organized you are the more success you’ll have.