What are the 3 Levels of Indemnification?

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If you stop and think about it for a moment, why does anyone refer back to a contract? It’s, unfortunately, when a problem arises. Depending on what the issue is, different contract articles may come into play. So before signing any contract, it’s best to understand what each article is about and how it can affect your ability to do the work. Let’s take a deep dive into one of the articles—Indemnification—as this article appears in almost all contracts in one form or another.

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Topics: Contracts

Liquidity Ratios for Contractors (Part 2)

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Last week we explored the types of financial ratios available to the Contractor and began investigating liquidity ratios. This week, we will continue our discussion on liquidity ratios. We will be referring back to our XYZ Company example from last week.

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Topics: Surety Bonding

Liquidity Ratios for Contractors (Part 1)

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Financial statements report the condition of a construction company and serve as a basic measurement of the company’s strength or weakness. To Creditors like Banks and Sureties, these statements are an essential underwriting tool when making decisions like bonding to support the Contractor. The ability to read and understand these statements is an extremely valuable management tool.

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Topics: Surety Bonding

Defining and Understanding Force Majeure

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Triggering a Force Majeure is about living by the exact words. These clauses are typically interpreted with a very narrow view. The words are generally not given a broad meaning and therefore the exact wording used in these clauses is very important. First, let’s take a step back and define what a Force Majeure actually is. A Force Majeure Clause is a contractual provision that may operate to excuse a party from a contract as a result of an unexpected and disruptive event.

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Topics: Contracts

Understanding Premises Operations and Products-Completed Operations

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As a working Trade Contractor, your company is typically required to have General Liability (GL) coverage before entering a project site. Within your GL policy, you have coverage for Premises Operations and Products-Completed Operations as a Named Insured. Since both Premises and Completed operations coverages are included in your typical General Liability policy, there will likely be contractual requirements that ask you to provide Additional Insured endorsements showing coverage for the Owner, General Contractor and/or Trade Contractor.

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Topics: Additional Insured, Completed Operations Coverage

Will My Insurance Cover COVID-19 Claims? (Part 2)

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Last week we began the dialogue on possible COVID-19 claims and what, if any, insurance coverage could be triggered. This week, we will expand that discussion to the following coverages—Pollution, Professional, and Subcontractor Default Insurance (SDI).

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Topics: Claims

Will My Insurance Cover COVID-19 Claims? (Part 1)

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As the COVID-19 pandemic touches the construction industry at large, there are many questions surrounding insurance coverage on a job site and possible subsequent COVID-19 claims. This series will review some of the more common coverages and things to consider given coverage uncertainty.

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Topics: Claims

How Bonded Principals Respond to Labor & Material Payment Bond Claims

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A surety bond is a three-party contract between the Surety, the Principal, and the Obligee. The Surety is the party that issues the Performance Bond along with the Labor and Material Payment Bond, which promises to answer for the default of the second party—its Principal. The Principal, in many cases, is a General Contractor. Typically, a Surety will become aware of any project problems when claims are made against the Payment Bond. This includes allegations of unpaid subcontractors and material suppliers.

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Topics: Surety Bonding

A General Guide to Surety Bonds

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Sureties are a specialized division within the insurance industry that work with Contractors to underwrite and provide bonds. When working on a construction project, you may be asked to provide a bond. A bond is a three party agreement between the Surety, the project Owner, and the contractor on the project.

There are several different types of bonds, but each is written to guarantee certain contractual obligations and to guarantee the contractor’s duties to the Owner-provided that the Owner fulfills its obligation to the contractor. Below is a list of the most frequent types of bonds:

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Topics: Surety Bonding

Not All Surety Bond Programs Are Created Equal

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Surety bond programs are not a one-size-fits-all for construction companies. This is the reason why we see hundreds of surety companies in the marketplace nationwide, each having their own carved-out niche.

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Topics: Surety Bonding