Subcontractor Default Insurance - Best Practices and Claims Mitigation
Subcontractors are a vital part of any construction project, but one miscalculated decision could put an entire project at risk, leaving you responsible for economic or legal setbacks. Subcontractor Default Insurance (SDI) is a necessary protection for all contractors, safeguarding you from costs incurred if one or more of your subcontractors default.
Watch the on-demand webinar, Mitigate Your Risk: Subcontractor Default Insurance, with Alliant Insurance Services, where we provide an overview of SDI, including how it differs from surety bonds and the benefits it offers. We discuss current market conditions and emerging trends that impact the construction industry, as well as strategies for mitigating subcontractor default risk.
Key Takeaways:
- SDI Overview: SDI is a first-party insurance policy designed to protect general contractors from financial losses due to subcontractor defaults. Unlike surety bonds, SDI provides greater control over the claims process and faster resolution.
- Market Conditions: The SDI market is robust, with multiple carriers offering various coverage options. However, the industry is experiencing an uptick in subcontract defaults due to factors like inflation and supply chain issues.
- Risk Mitigation: Implementing a robust risk management strategy is crucial. Credit scoring and modeling tools, like the C2M platform, can help identify high-risk subcontractors and manage overall exposure.