Subcontractor default insurance (SDI) - Revision history

Designing Buildings at 09:02, 2 December 2020

2020-12-02T09:02:56Z

← Older revision		Revision as of 09:02, 2 December 2020
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	SDI can be advantageous over a normal default process by avoiding litigation and delays that can impact on the project schedule.		SDI can be advantageous over a normal default process by avoiding litigation and delays that can impact on the project schedule.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Advance payment bond.		* Advance payment bond.
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	* [https://www.projectcubicle.com/construction-insurance-a-builders-guide/ Construction Insurance:A Builders Guide]		* [https://www.projectcubicle.com/construction-insurance-a-builders-guide/ Construction Insurance:A Builders Guide]

−	[[Category:International]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:International]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]

107.170.127.117 at 19:21, 2 July 2019

2019-07-02T19:21:50Z

← Older revision		Revision as of 19:21, 2 July 2019
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	* Surety.		* Surety.
	* Warranty.		* Warranty.
		+
		+	=== External references ===
		+
		+	* [https://www.projectcubicle.com/construction-insurance-a-builders-guide/ Construction Insurance:A Builders Guide]

	[[Category:International]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]		[[Category:International]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]

Editor at 12:25, 26 July 2018

2018-07-26T12:25:44Z

← Older revision		Revision as of 12:25, 26 July 2018
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	* Legal indemnities.		* Legal indemnities.
	* Liens.		* Liens.
		+	* Mechanic’s lien.
	* Performance bond.		* Performance bond.
	* Retainage.		* Retainage.

Designing Buildings at 08:19, 26 July 2018

2018-07-26T08:19:02Z

← Older revision		Revision as of 08:19, 26 July 2018
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	Rather than being a guarantee like a surety bond, it is an insurance product. A surety bond is an agreement between three parties – the contractor, subcontractor and surety. The performance of the subcontractor is guaranteed by the surety. By contrast, SDI is an agreement between the contractor and insurer.		Rather than being a guarantee like a surety bond, it is an insurance product. A surety bond is an agreement between three parties – the contractor, subcontractor and surety. The performance of the subcontractor is guaranteed by the surety. By contrast, SDI is an agreement between the contractor and insurer.

−	Rather than providing a guarantee of performance or payment, the insurer commits to reimbursing the contractor for costs relating to ~~the~~ default of a subcontractor or supplier. This is usually a high-deductible dollar amount, which means that the contractor must absorb some costs in rectifying the default, but the exact amount is negotiable.	+	Rather than providing a guarantee of performance or payment, the insurer commits to reimbursing the contractor for costs relating to default of a subcontractor or supplier. This is usually a high-deductible dollar amount, which means that the contractor must absorb some costs in rectifying the default, but the exact amount is negotiable.

−	The insurer can also replace the performance bonds of subcontractors by providing the contractor with additional ~~coverage~~ against default losses. However, it does not act as a substitute for a payment bond, meaning that if the contractor defaults on payment to the subcontractor or becomes insolvent, the subcontractor is not covered by the ~~SDI~~ policy.	+	The insurer can also replace the performance bonds of subcontractors by providing the contractor with additional cover against default losses. However, it does not act as a substitute for a payment bond, meaning that if the contractor defaults on payment to the subcontractor or becomes insolvent, the subcontractor is not covered by the policy.

−	SDI can ~~prove~~ advantageous over a normal default process by avoiding ~~the~~ litigation and delays that can ~~often negatively~~ impact ~~upon~~ the project schedule~~. In addition, it can result in reduced premium costs and provide contractors with the incentive to improve its subcontractor prequalification process and better manage poor performance~~.	+	SDI can be advantageous over a normal default process by avoiding litigation and delays that can impact on the project schedule.

	= Find out more =		= Find out more =
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	* Advance payment bond.		* Advance payment bond.
	* Bonds.		* Bonds.
−	* [[Contractors~~'_all~~-risk_insurance\|Contractors’ all-risk insurance]].	+	* [[Contractors%27_all-risk_insurance\|Contractors’ all-risk insurance]].
	* Contract works insurance.		* Contract works insurance.
	* Insurance.		* Insurance.

Editor at 15:36, 25 July 2018

2018-07-25T15:36:33Z

← Older revision		Revision as of 15:36, 25 July 2018
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	* Advance payment bond.		* Advance payment bond.
	* Bonds.		* Bonds.
−	* Contractors’ all-risk insurance.	+	* [[Contractors'_all-risk_insurance\|Contractors’ all-risk insurance]].
	* Contract works insurance.		* Contract works insurance.
	* Insurance.		* Insurance.
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	* Performance bond.		* Performance bond.
	* Retainage.		* Retainage.
		+	* Sub-contractor.
	* Surety.		* Surety.
	* Warranty.		* Warranty.

	[[Category:International]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]		[[Category:International]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]

Editor: Created page with "In the United States, subcontractor default insurance (SDI), commonly known by its popular brand name Subguard, is a safeguarding tool for contractors to mitigate the risk of the..."

2018-07-25T15:35:58Z

Created page with "In the United States, subcontractor default insurance (SDI), commonly known by its popular brand name Subguard, is a safeguarding tool for contractors to mitigate the risk of the..."

New page

In the United States, subcontractor default insurance (SDI), commonly known by its popular brand name Subguard, is a safeguarding tool for contractors to mitigate the risk of their subcontractors defaulting.

Rather than being a guarantee like a surety bond, it is an insurance product. A surety bond is an agreement between three parties – the contractor, subcontractor and surety. The performance of the subcontractor is guaranteed by the surety. By contrast, SDI is an agreement between the contractor and insurer.

Rather than providing a guarantee of performance or payment, the insurer commits to reimbursing the contractor for costs relating to the default of a subcontractor or supplier. This is usually a high-deductible dollar amount, which means that the contractor must absorb some costs in rectifying the default, but the exact amount is negotiable.

The insurer can also replace the performance bonds of subcontractors by providing the contractor with additional coverage against default losses. However, it does not act as a substitute for a payment bond, meaning that if the contractor defaults on payment to the subcontractor or becomes insolvent, the subcontractor is not covered by the SDI policy.

SDI can prove advantageous over a normal default process by avoiding the litigation and delays that can often negatively impact upon the project schedule. In addition, it can result in reduced premium costs and provide contractors with the incentive to improve its subcontractor prequalification process and better manage poor performance.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Advance payment bond.
* Bonds.
* Contractors’ all-risk insurance.
* Contract works insurance.
* Insurance.
* Legal indemnities.
* Liens.
* Performance bond.
* Retainage.
* Surety.
* Warranty.

[[Category:International]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]