What is the purpose of a payment bond?

The purpose of a payment bond is to ensure that all subcontractors and suppliers involved in a construction project will be paid for their services and materials. When a contractor secures a payment bond, it protects these parties by providing a guarantee from the surety (the company that issues the bond) that they will receive payment even if the primary contractor fails to fulfill their financial obligations. This assurance encourages subcontractors and suppliers to participate in the project without the fear of not getting compensated, which ultimately contributes to smoother project execution and helps prevent liens being placed on the property for unpaid work.

The other options deal with different aspects of project management or performance guarantees, but they do not pertain specifically to the payment bond's function of securing payment for services rendered.