The surety can deny your claim on a technicality you created in the first week. That is the part project owners rarely see coming. When a contractor abandons a job, the instinct is to move fast: hire someone new, keep the crew working, get the schedule back on track. But most performance bonds carry conditions about notice, default declaration, and letting the surety participate in the fix. Skip those steps and the company that guaranteed the job can walk away from the loss.
What follows is an ordered punch-list. The sequence matters as much as the individual tasks, because a performance bond is a contract with its own triggers, and you either satisfy them or you don’t. Work through it deliberately in the days after your contractor stops showing up.
Confirm the default and document it before you touch anything
Before you declare anything, be sure the contractor is actually in default and not just behind. Read your contract’s default provisions. A missed deadline, a walked-off crew, or unpaid subs may each qualify, but the contract defines the threshold, not your frustration.
Once you’re reasonably certain, freeze the evidence. Photograph the site from every angle, date-stamped. Log the last day anyone worked. Save the texts, emails, and voicemails where the contractor stops responding or admits they’re pulling out. Pull the pay applications against actual completed work so you can show what was paid for versus what exists on the ground. If you’re managing a build in the Denver metro and subs are calling about missing checks, write down each call. This record is what the surety’s adjuster will scrutinize, and gaps in it become their argument for paying less or nothing.
Notify the surety and pull the paperwork that proves what performance bonds cover
Find the bond itself, then read the notice clause. Most performance bonds name the surety, the penal sum, and the exact steps required to trigger coverage, and many require written notice within a set window and often a formal declaration of default before you replace the contractor. Send notice in writing, by a method that creates a delivery record, to the address on the bond. Copy the contractor if the bond requires it.
Gather the full file the adjuster will ask for: the signed contract, the bond, all change orders, every pay application and lien waiver, the project schedule, and your default documentation. Many owners misunderstand the scope of the protection they hold, so it’s worth a careful read of what performance bonds cover before you frame your claim, since the surety’s obligation is to complete the contracted work or pay the cost of completion, not to compensate you for every downstream headache.
Expect the surety to investigate before committing to anything. It may offer to finance the original contractor, arrange a completion contractor, or pay you to finish. Don’t force your own solution before giving them the chance the bond usually reserves for them, or you may forfeit reimbursement.
Preserve the site, the schedule, and your right to make a claim
While the surety works through its process, you still have a property to protect and, in many cases, a duty to keep losses from growing. Secure the site against weather and theft, cover exposed work, and take reasonable steps that a court would call mitigation. Keep a running cost ledger from the day of the walk-off, because completion costs above the original contract balance are typically what the bond reimburses.
Don’t quietly hire a replacement and hope the surety pays later. Get their sign-off on the completion path in writing. If the bond required their consent and you didn’t get it, you’ve handed them a defense. Meanwhile, keep talking to your subcontractors; a completion contractor in the Denver area will often want the ones already familiar with the job, and the surety will want their pricing anyway.
Before you close out the first month, confirm you’ve handled the four things that decide most claims:
- Written default and notice sent within the bond’s deadline, with proof of delivery.
- A complete, dated evidence file the adjuster can’t poke holes in.
- The surety given its contractual chance to choose the completion method.
- A cost ledger running from the walk-off forward.