5 Costly Mistakes That Will Sink Your Payment Bond Claim (And How to Avoid Them)
Filing a payment bond claim should be a straightforward way to get paid on a California public works project, but one small mistake can wipe out your rights before the surety ever reviews your paperwork. Most contractors and suppliers don’t lose their claims because the work wasn’t done. They lose them because they made these big yet common mistakes.
The good news is that these mistakes are completely avoidable. In this guide, we break down the five most common mistakes that sink payment bond claims and show you exactly how to steer clear of them.
What is a Payment Bond Claim and How Do They Work in California?
A payment bond claim is a legal tool that helps subcontractors, suppliers, and labor providers get paid on California public construction projects. Because you can’t file a mechanics lien against public property, the prime contractor is required by law to post a payment bond. This bond guarantees that everyone on the project gets paid for the labor and materials they provide.
If you perform work or supply materials but are not paid, you can make a claim against the payment bond instead of placing a lien. The claim is sent directly to the surety company listed on the bond.
In California, the process is straightforward:
You must have sent the required 20-day preliminary notice, which is a specific requirement under California law.
You identify the surety company and confirm the bond information.
You prepare and serve a written bond claim with the details of the unpaid work.
The surety investigates the claim and may request supporting documents before issuing payment.
A valid payment bond claim gives you a reliable path to recover what you are owed, as long as it’s filed correctly and on time.
Common Mistakes To Avoid While Filing a Payment Bond Claim
Mistake #1: Misunderstanding Preliminary Notice Requirements
Your payment bond rights often depend on whether you sent the required Preliminary Notice.
Missing it, sending it late, or leaving out key information can invalidate your claim, even if you did the work perfectly. Many subcontractors and suppliers lose their bond rights before the project even finishes simply because the notice wasn’t handled correctly.
How to avoid it:
Track preliminary notice deadlines at the start of every project and send notices on time.
Use a standardized template or a filing service so every notice includes the correct project, contractor, and scope details.
Mistake #2: Not Tracking Deadlines
Payment bond claims are bound by strict deadlines.
If you don’t know your last furnishing date, it becomes easy to miss the cutoff for serving your claim. Serving your notice even one day late can make the claim unenforceable. Keeping accurate records and documentation throughout the project is essential.
How to avoid it:
Mistake #3: Filing the Claim Incorrectly or in the Wrong Place
A common and costly issue is sending the claim to the wrong surety, the wrong address, or without all the required information.
Payment bonds list specific surety details, and California law outlines what must be included in the claim. Any missing element in the payment bond, such as the amount claimed, description of the work done, dates of the important milestones, or any relevant project information, can cause delays or even a denial in many cases.
How to avoid it:
Always verify the bond, surety name, and the exact mailing address before sending your claim.
Double-check that your claim includes the amount due, the work performed, dates, and all project identifiers required by California law.
Mistake #4: Failing to Notify the Surety Company Early
Some claimants wait too long to contact the surety, hoping the issue will work itself out.
Sureties expect timely notice and early communication. Delayed contact can slow the investigation, increase scrutiny, and make the claim more difficult to resolve.
How to avoid it:
Mistake #5: Not Including Complete Supporting Documentation
Sureties rely on documentation to verify your claim.
Invoices, delivery tickets, timesheets, contracts, change orders, and payment records must be consistent, accurate, and complete. Any missing data or inaccurate documentation in the claim gives the surety grounds to delay, question, or even reduce your claim.
How to avoid it:
Organize your invoices, delivery tickets, time logs, contracts, and change orders throughout the project.
Include every document that proves what you did, when you did it, and how much you are owed. This gives a good impression to the surety, ensuring that each and every detail is tracked and recorded.
How Easy Law Helps You Avoid These Costly Claim Mistakes
If you want to avoid these costly mistakes altogether, Easy Law, Inc. makes the process simple and stress-free.
We prepare and serve your preliminary notices, payment bond claim in California, and other required documents accurately. With thousands of notices filed and 40+ years of experience handling construction paperwork, Easy Law helps you protect your payment rights without the risk of filing errors.
Easy Law Construction Notices is not a law firm, and nothing in this article should be construed as legal advice. If you are seeking legal advice regarding construction matters, you can contact The Green LawGroup, LLP, for a free initial consultation.