4.3.4.5.1 Labor and Materials Covered

• Jurisdiction: Arizona

Courts liberally construe surety bonds with respect to what types of labor and materials are covered by the bond. Generally speaking any type of labor and material necessary to construct the work or consumed in the performance of the work is covered by the bond.

For example, lumber used in the project, but neither incorporated into nor substantially destroyed in the work, may not be covered under a payment bond but a royalty paid for the right to use a patented process for combining materials used in connection with a project may come under the terms of the bond.^[89] On the other hand, lumber that is substantially consumed (less any salvage value) may be covered by the bond.^[90] Rental equipment may also be covered by a bond that protects persons supplying labor and material to the contractor.^[91]

Because the Arizona legislature has adopted...