How Surety Bonds Can Help Project Owners Minimize Their Risk

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In the construction industry, Surety bonds are often an important part of a project. They help keep a project on track and ensure that there is a backup plan in place for an Owner, in case a Contractor cannot complete their work. In this situation, a Surety bond is a guarantee by a Surety company to fulfill the obligation of a defaulting Contractor. Bonds protect the Project Owner against a loss as a result of the Contractor's failure to meet this contractual obligation. Here are a few ways that surety bonds can help project owners minimize their risk.

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Topics: Surety Bonding

What is a Surety's Right to Subrogation?

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Subrogation is a circumstance where an entity (Surety) is substituted into the place of another entity (the Principal) with regard to a claim or legal right of the Surety’s Principal. As a result, the Surety will “step into the shoes” of its Principal and assume the Principal’s claims, legal rights, and remedies.

The Surety promises the Project Owner that it will fulfill the contractual obligations of its Principal in the event the Principal defaults on a bonded contract.

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Topics: Surety Bonding

Ensure Your Surety Program Withstands the Construction Shifts

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This article was written by TSIB’s Jeremy Pendergast and is published in the Construction News from Austin, Texas- Construction News October 2020 Edition.

In these unprecedented economic times, the ability for Contractors to have a Surety Bond program that meets their need to bid work and sustain their overall capacity to build a backlog is paramount to successfully navigate this changing environment.

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Topics: Surety Bonding

COVID-19 Business Interruption Court Ruling – What it Means

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An unprecedented court ruling regarding business interruption insurance claims impacted by COVID-19 ‘across the pond’ has many insurers and insureds anxiously awaiting any ripple effects to be felt in the U.S.   

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Topics: Claims, COVID-19

The Differences Between Certified Payroll & Wrap-Up Payroll

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Over the course of a construction project, Contractors may be asked to submit two different types of payroll for work performed on a particular project or contract. These payrolls are known as Certified Payroll and Wrap-Up Payroll. While this may seem cumbersome, these two types of payroll are vastly different and are used for different purposes.

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Topics: EMR, Workers' Compensation, Wrap-Up Insurance

Concurrent Delay vs. Assessment of Liquidated Damages

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Initially, courts dealt with a dearth of sophistication when determining the responsibility for the concurrent delay in the assessment of liquidated damages. Courts have now been permitting the assessment of liquidated damages, even where there are both Contractor and Owner-caused delays. Critical Path Method (CPM) scheduling software—aided by expert testimony—made a change in approach and willingness to use complex scheduling possible. Courts have tended to award liquidated damages with reasonable certainty when caused by the Contractor.

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Topics: Claims

Are We Done Yet? Strategies for a Successful Wrap-Up Closeout

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Congratulations! You and your lower-tier Trade Contractors have finished all of your work on the project site. Today, we will discuss the closeout process for a Trade Contractor working on a Wrap-Up program. Each project is different, and it’s important to always start by reviewing the requirements of the program and/or the Wrap-Up manual.

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Topics: Wrap-Up Insurance

How the Courts Rule on Project Delays

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Despite the fact there is a set project schedule, we often find that construction projects are delayed and finish later than expected. As a result, Owners will often attempt to assess their liquidated damages against their Contractors for the delay at the end of the project. In doing so, Contractors typically claim that the delay was either Owner-Caused or a Concurrent Delay, which means the delay occurred due to acts of others beyond their control by multiple, independent parties.

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Topics: Surety Bonding, Claims

5 New Scenarios Regarding COVID Construction Claims

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The construction industry has started picking up the pieces from COVID-19. Together, we have learned new lessons and developed new strategies for the future. Since this pandemic is unique, as disputes start to occur, we will start to see how the courts take precedent on COVID-19 cases. Here are 5 new construction scenarios to consider that could potentially lead to a claim.

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Topics: Claims

The Simple Step-by-Step Guide for the Worker’s Comp Claims Process

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Managing Worker’s Compensation (WC) claims for your employees can be complex and tricky. Here is a breakdown of the claims process to assist you in understanding what to expect when an injury is reported.

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Topics: Claims