Labour & Material Payment Bond
If you are looking to provide bonds for a project or tender that has Labour & Material Payment Bond (L&M) requirements, you’ve come to the right place. We provide full contract bonding services to our clients for all types of contracts and projects. In order to obtain the ability to provide a Labour & Material Bond, you’ll require what we call a Bond Facility. Learn more below and apply today!
Learn more about L&M Bonds
What is a Labour & Material Payment Bond?
A Labour & Material Payment Bond provides security for the principal’s subcontractors and suppliers in the event that the principal contractor fails to pay them. This document guarantees that the Surety will pay out the said subcontractors and suppliers should a principal company default occur. The most frequently requested bond amounts for a Labour & Material Payment Bond are for 50% or 100% of the contract price (and must be accompanied by a Peformance Bond).
Why do I need a Labour & Material Payment Bond?
Labour & Material Payment Bonds are more often required in projects for the public sector; however, their use is increasing in private contracts as well. With the financial backing of a registered Surety Company in Canada, you can ensure that your company will qualify for whatever project is of interest.
How much does a Labour & Material Bond cost?
The cost of a Labour & Material Payment Bond will vary depending on the rates of your bond Facility and the size of the contract the bond is required for. Standard rates for Performance Bonds range from $4 – $25 per $1,000 of the contract price. Please don’t hesitate to give us a call if you’d like to discuss what determines a companies bond rates.
The ability to obtain any contract bonds (including a L&M Bond), as stated above, is part of an annual subscription called a Bond Facility which is typically in the range of $1,500 – $5,000 per year.