Surety bonds • Alabama
Alabama Public Works Bonds (Ala. Code § 39-1-1): Performance and Payment Requirements
Under Ala. Code § 39-1-1, contractors on Alabama public works contracts of $100,000 or more must provide a performance bond of 100% of the contract price and a payment bond of at least 50%. The payment bond protects anyone who furnishes labor, materials, or supplies and is not paid.
This guide covers the bonds, who they protect, claim deadlines, and cost. Blake Insurance Group is an independent agency and does not give legal advice; a licensed agent can help contractors set up bonding.
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Required bonds
| Bond | Amount |
|---|---|
| Performance bond | 100% of the contract price |
| Payment bond | Not less than 50% of the contract price |
Source: Ala. Code § 39-1-1. Bonds are not required on contracts under $100,000; the threshold was raised in 2023 (Bradley).
Claims on the payment bond
- Anyone who furnished labor, materials, or supplies for the public work and was not paid can claim.
- A suit cannot be filed until 45 days after written notice of the claim to the surety; registered or certified mail is sufficient.
- The suit must be filed within one year of final settlement of the contract.
- The contractor publishes notice of completion for at least three weeks, and final settlement waits 30 days after that notice.
Source: Ala. Code § 39-1-1.
Who the bonds protect
The performance bond protects the public owner if the contractor does not finish the work. The payment bond protects subcontractors, workers, and suppliers. See our performance bond and payment bond guides.
How much Alabama contract bonds cost
Contract bonds are priced as a percentage of the bond amount, commonly about 0.5% to 3% based on the contractor’s finances and experience (NASBP).
Alabama public works bond FAQs
When are bonds required on Alabama public works?
On public works contracts of $100,000 or more.
How much is the Alabama payment bond?
At least 50% of the contract price, alongside a 100% performance bond.
How long do I have to sue on an Alabama payment bond?
One year from final settlement of the contract, after giving the surety 45 days’ written notice.
Related guides
- Alabama surety bonds
- Performance bonds
- Payment bonds
- Tennessee public works bond
- Georgia public works bond
- Surety bonds
- Surety bond cost
- Surety bond cost calculator
- Buy a surety bond online
- South Dakota public works bond
- West Virginia public works bond
- New Mexico public works bond
- Nebraska public works bond
- Kansas public works bond
- Iowa public works bond
- Oklahoma public works bond
- South Carolina public works bond
Important information
Compensation. The link in the partner quote box near the top of this page is sponsored, and Blake Insurance Group may be paid if you make a purchase. Sponsored placement does not affect the other information on this page.
Independent agency. Blake Insurance Group LLC is an independent insurance agency. Licensed insurance producer NPN 16944666. Licensed states: AZ, AL, TX, CA, NY, OH, FL, NC, VA, GA, OK, NM, IA, KS, MI, NE, SC, SD, WV, IL, NJ, PA, TN, and WA. Which insurance companies we can quote depends on our current appointments, the product, and your state. Mentioning a company on this page does not mean we represent it.
Cost figures. Published averages and ranges are cited from the sources named, as of the dates shown. They are not quotes and may not reflect your price, which depends on the insurer, the surety, your credit, the bond type, and underwriting.
Availability. Coverage, prices, discounts, and eligibility vary by insurer, state, and applicant, and are subject to underwriting. The issued policy controls.
Your next step
Tell us about your Alabama public project, and a licensed agent will help you set up bonding.
