Illinois Performance & Payment Bonds

To obtain performance and payment bonds in Illinois, contractors must provide comprehensive financial documentation including: business and personal tax returns (typically 3 years), current financial statements (balance sheet and income statement), bank statements (3-12 months), work-in-progress schedule showing current projects, company resume with experience history, personal financial statements from owners/principals, credit authorization forms, and the project contract documents. Surety companies review this information to assess the contractor's financial strength, creditworthiness, bonding capacity, and ability to complete the project. Approval time ranges from 24 hours for simple bonds to several days for complex projects.

Subcontractors, material suppliers, and laborers who have not been paid for work performed or materials supplied on an Illinois public works project can file a claim against the payment bond. Claims must be filed within 180 days of the last date work was performed or materials were delivered. The payment bond protects these parties from non-payment and prevents mechanic's liens from being placed on public property. The surety company will investigate the claim and pay legitimate amounts, then seek reimbursement from the bonded contractor.

As of January 1, 2024, performance and payment bonds are required on Illinois public works projects that exceed $150,000. This threshold increased from the previous $50,000 requirement under the Public Construction Bond Act (30 ILCS 550). Local government units (counties, townships, municipalities, school districts, and library districts) may require bonds for projects of $150,000 or lower if they adopt a resolution or ordinance establishing that requirement. Both bonds must equal 100% of the contract amount.