This Lorman Education Webinar is approved for 1.5 CPD Credits.
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Learn costs and defenses, along with the differences and protections provided by payment bonds, performance bonds and contractor default insurance. Many project owners face uncertainty and financial loss due to the nonperformance or financial default of a contractor. Historically, owners have protected themselves from this potential by having contractors post performance bonds and/or payment bonds. Typically, where these bonds are provided, coverage is obtained under both a payment bond and a performance bond. A performance bond is issued by a surety to guarantee satisfactory completion of a project in the event of nonperformance or default by a contractor. A payment bond guarantees payment to the subcontractors and material suppliers for the labor and material supplied to a project. Recently, project owners have also used contractor default insurance as a potential replacement or substitute for a payment bond or a performance bond. Contractor default insurance provides indemnification to the project owner for the direct and indirect costs incurred as the result of subcontractor default.
This topic helps project owners understand the differences and protections provided by payment bonds, performance bonds and contractor default insurance. The potential coverage provided by each. Costs of payment and performance bond premiums and how to trigger coverage under each. Identify the potential defenses available to coverage under a payment bond, performance bond and contractor default insurance. In addition, a discussion of the potential of obtaining subcontractor default insurance or Sub Guard and the differences and potential benefits of Sub Guard versus construction bonds.
- You will be able to describe the purpose of and the differences between a payment bond, a performance bond and contractor default insurance.
- You will be able to discuss the potential benefits to the project owner from having the contractor provide a performance bond, payment bond or contractor default insurance.
- You will be able to explain the differences between a payment bond, a performance bond and contractor default insurance.
- You will be able to identify the costs to the project owner of having the contractor procure a payment bond, performance bond or contractor default insurance.