Subcontract Bonds: Reducing Subcontractor Financial Risk

摘要

Construction is a risky business, especially when it comes to identifying, assessing and managing the risk of subcontractor performance. An unqualified subcontractor, particularly one performing critical path specialty work, can have a major impact on a prime contractor's project. Subcontract bonds help identify the right subcontractor with which to work and shift the risk of subcontractor failure to a surety company. Surety bonding is a process by which the surety prequalifies the subcontractor and supports that judgment by issuing performance and payment bonds.