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Protection Under the Illinois Public Construction Bond Act
Illinois Payment Bond Claim for Public Construction Projects
On Illinois public construction projects, payment bonds issued by surety companies guarantee that subcontractors and suppliers will be paid. Understanding the notice requirements, deadlines, and surety process is essential to recovering what you are owed.
Last updated: February 2026
What Is a Payment Bond and Why It Matters
A payment bond is a three-party agreement among a surety company, the general contractor (principal), and the public body (obligee). The surety guarantees that the general contractor will pay its subcontractors, material suppliers, and laborers. If the general contractor fails to pay, the surety must satisfy valid claims up to the bond amount.
Payment bonds are critical on public projects because government property cannot be liened. The bond replaces the lien as the primary security mechanism. Unlike a lien on public funds — which only reaches money still held by the public body — the surety is obligated to pay regardless of whether the public entity has already disbursed the contract funds.
Who Can File a Payment Bond Claim?
Notice Requirements for Bond Claims
The notice requirements for Illinois payment bond claims depend on the claimant's position in the contract chain. Under the Public Construction Bond Act (30 ILCS 550), parties with a direct contract with the general contractor must provide written notice to the contractor and the public body. Those without a direct contract — such as second-tier suppliers — must provide more detailed notice, including identifying the party they contracted with.
Direct Subcontractors and Suppliers
Parties with a direct contract with the general contractor must serve written notice on the contractor and the public body within 180 days of their last furnishing of labor or materials.
Sub-Subcontractors and Lower-Tier Suppliers
Parties without a direct contract with the general contractor must serve notice within 90 days of their last furnishing. Notice must be sent to both the general contractor and the public body.
Step-by-Step Bond Claim Process
Identify the Bond
Determine whether a payment bond exists on the project. On public projects over the statutory threshold, a payment bond is required. Request a copy of the bond from the public body or the general contractor.
Serve Written Notice
Provide written notice of your claim to the public body and the general contractor within the applicable deadline (180 days for first-tier, 90 days for second-tier). Include the amount owed, a description of the work or materials furnished, and the project identification.
Demand Payment from Surety
Send a formal demand to the surety company that issued the payment bond. Include copies of your contracts, invoices, delivery tickets, and proof of the amounts owed. The surety will investigate the claim before deciding to pay or deny it.
File Lawsuit if Necessary
If the surety does not pay your claim, you must file a lawsuit against the surety within one year of your last date of furnishing. The lawsuit is filed in the circuit court of the county where the project is located.
Critical Deadlines for Bond Claims
Notice Deadline (First-Tier Claimants)
You must provide written notice of your claim to the public body and general contractor within 180 days of your last date of furnishing labor or materials. Second-tier claimants have only 90 days.
Suit Deadline
Any lawsuit against the surety on a payment bond must be filed within one year of the last date of furnishing labor or materials. Missing this deadline permanently bars your claim against the bond.
Dealing with the Surety Company
Surety companies are sophisticated parties with experienced claim adjusters and legal counsel. When you submit a bond claim, the surety will investigate the claim thoroughly — reviewing your contract, confirming the work was performed, and verifying the amounts. The surety may also contact the general contractor for its side of the dispute.
Having complete documentation from the outset strengthens your position and accelerates the resolution process. Sureties are more likely to pay promptly when the claim is well-supported by contemporaneous records. If the surety denies or disputes the claim, you must be prepared to file suit within the one-year deadline.
Emalfarb Law LLC has extensive experience negotiating with surety companies and litigating contested bond claims. Early engagement with experienced counsel can make the difference between a prompt recovery and protracted litigation.
The Illinois Public Construction Bond Act (30 ILCS 550)
The federal Miller Act requires payment bonds on all federal construction projects exceeding $35,000 and serves as the model for Illinois's bond claim framework. Illinois's own version — often called the "Little Miller Act" under 30 ILCS 550 — imposes similar requirements on state and local government projects. Under 30 ILCS 550/1, every public body awarding a construction contract must require the contractor to furnish a payment bond protecting subcontractors and suppliers.
The statute establishes a two-tier timeline: subcontractors and suppliers with a direct contract with the principal contractor must serve written notice within 180 days. Those without a direct contract must serve notice within 90 days. After providing notice, the claimant must file suit on the bond no later than one year after the last date of work or material delivery. Courts construe these deadlines strictly, and missing either window forfeits the bond claim entirely.
Common Mistakes That Invalidate Bond Claims
Payment bond claims fail for preventable reasons more often than most contractors realize. The most frequent mistake is sending defective or late notice. The notice must identify the claimant, the project, and the amount claimed with reasonable specificity; vague or incomplete notices may not satisfy the statutory requirements.
- Directing notice to the wrong party — notice must reach both the contractor and surety
- Miscalculating the deadline by measuring from the wrong triggering event (last invoice vs. last furnishing)
- Assuming a lien on funds claim automatically preserves your bond claim rights
- Failing to obtain a copy of the actual payment bond to confirm surety identity
- Waiting too long to file suit after the surety denies or ignores the claim
- Confusing state bond act requirements with federal Miller Act procedures
Bond Claims vs. Lien on Public Funds: Key Differences
Payment Bond Claim
Targets the surety company. Recovery does not depend on whether funds remain in the public treasury. Governed by 30 ILCS 550. Notice within 180 days; suit within 1 year.
Lien on Public Funds
Targets money held by the government entity. If funds have been disbursed, recovery may be limited. Governed by 770 ILCS 60/23. Suit within 90 days of notice.
In many cases, both remedies can be pursued simultaneously to maximize recovery potential. See our lien on public funds guide for detailed procedures.
Evidence Checklist for Payment Bond Claims
A successful payment bond claim requires thorough documentation. The surety company will scrutinize every aspect of your claim before agreeing to pay. Preserve the following records: