A payment bond protects the buyer against liens that might be granted to suppliers of material and labor to the bidder,in the event the bidder does not make proper payment to its suppliers.

Payment Bond

A type of surety bond that guarantees the payment of subcontractors, laborers, and suppliers on construction projects.

Liens

Legal claims or rights against property or assets that secure the payment of a debt or fulfillment of some obligation.

Suppliers

Entities that provide goods or services to another entity, typically in a business-to-business relationship.