Surety bonds • Michigan
Michigan Public Works Bonds (MCL 129.201): Requirements and Deadlines
Under Michigan Public Act 213 of 1963 (MCL 129.201–129.212), contracts over $50,000 for the construction, alteration, or repair of a public building or public work require a performance bond and a payment bond. Each bond is in an amount fixed by the governmental unit, but not less than 25% of the contract amount.
This guide covers when bonds are required, bond amounts, payment bond 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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When bonds are required
Under Michigan Public Act 213 of 1963 (MCL 129.201–129.212), before a contract exceeding $50,000 for the construction, alteration, or repair of a public building or public work is awarded, the contractor must provide a performance bond and a payment bond. Each bond is in an amount fixed by the governmental unit but not less than 25% of the contract amount. Many owners require more, so check the bid documents.
Payment bond notice and suit deadlines
- 30-day notice. A claimant without a direct contract with the principal contractor must serve notice within 30 days after first furnishing labor or materials.
- 90-day notice. The claimant must give written notice to the principal contractor and the governmental unit within 90 days after last performing labor or furnishing materials.
- One-year suit deadline. No action may be started more than one year after final payment was made to the principal contractor.
Source: Michigan Public Act 213 of 1963 (MCL 129.201–129.212). Deadlines are strict, so claimants should get legal advice early.
Who the bonds protect
The performance bond protects the governmental unit, and the payment bond protects subcontractors, suppliers, and laborers on the project.
How much Michigan contract bonds cost
Performance and payment bonds are usually priced together as a percentage of the bond amount, commonly about 0.5% to 3% based on the contractor’s finances and experience (NASBP).
Michigan public works bond FAQs
When are performance and payment bonds required in Michigan?
On public construction, alteration, or repair contracts exceeding $50,000.
How much are Michigan public works bonds?
An amount set by the governmental unit, but not less than 25% of the contract amount for each bond.
How long do I have to sue on a Michigan payment bond?
One year after final payment was made to the principal contractor.
Related guides
- Michigan surety bonds
- Performance bonds
- Payment bonds
- Ohio public improvement bond
- Illinois public construction 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
- Alabama public works bond
- Tennessee public works bond
- Washington public works bond
Important information
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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 Michigan public project, and a licensed agent will help you set up bonding.
