NASBP Publications and Reports

Subcontractor Default Insurance

Below are various resources on the topic of subcontractor default insurance (SDI).

Surety Bond Fraud

  • Sureties and Bond Producers May Be Liable-for-A-Contractors False Claims Act – Two recent decisions from the United States District Court for the District of Columbia and the United States Court of Federal Claims highlight that sureties and bond producers are not immune to the potentially severe consequences of the False Claims Act (“FCA”) and related federal fraud statutes.Mike Zisa and Susan Elliot of the law firm of Peckar & Abramson Surety Bond Quarterly Winter 2017 edition
  • Always Verify Your Bond! – NASBP developed this document in response to the stated interest of its Members, Associates, and Affiliates for many and various educational materials from NASBP and to help combat instances of fraudulent surety bonds through education. The document, Always Verify Your Bond!, is a one-page tool that surety professionals can give to their clients (and refer to themselves), which sets forth a two-step process to help them verify the authenticity of every contract surety bond before acceptance. The two-step process shows them how (1) to check the authority of the surety to issue the surety bond, and (2) to verify that the surety actually authorized the issuance of the surety bond. January 2017 edition.
  • Surety Bond Fraud – This is an article published in the Surety Bond Quarterly magazine Winter 2016 and written by Jay Labe, who serves on the NASBP Attorney Advisory Council. Labe is of counsel at the law firm of Allen & Curry, P.C. in Denver, CO.
  • The Importance of Surety Bond Verification – This article, coauthored by NASBP’s CEO, Mark H. McCallum, and SFAA’s General Counsel, Edward G. Gallagher, is reprinted with permission from the American Bar Association. The article is from the Public Contract Law Journal, Vol. 39, No. 1 Winter 2010.
  • Beware of Inadequate or Fraudulent Surety Bonds – This article, coauthored by NASBP’s then General Counsel and Director of Government Relations, Mark H. McCallum (now NASBP’s CEO), and SFAA’s General Counsel, Edward G. Gallagher, is reprinted with permission from a special advertising section in Engineering News-Record.
  • Know Your Bond Before You Sign – This article, coauthored by NASBP’s then General Counsel and Director of Government Relations, Mark H. McCallum (now NASBP’s CEO), and SFAA’s Director of Underwriting and Assistant Counsel, Robert J. Duke, provides insight to certain terms of a bond form, such as language that triggers the surety’s liability, varies the burden of proof, increases the surety’s monetary liability beyond the original penal sum of the bond, limits the surety’s response options, and lengthens the time the surety remains liable. This article was published in the November 2008 issue Construction Business Owner magazine.
  • Part 1 Battling Surety Bond Fraud: Why Bond Verification Is So Important – Part 1 of this two part article, written by NASBP’s General Counsel, Martha L. Perkins, was published in the Fall 2014 newsletter of the Fidelity & Surety Law Committee of the American Bar Association’s Tort Trial & Insurance Practice Section.
  • Part 2 Battling Surety Bond Fraud: Why Bond Verification Is So Important – Part 2 of this two part article, written by NASBP’s General Counsel, Martha L. Perkins, was published in the Winter 2015 newsletter of the Fidelity & Surety Law Committee of the American Bar Association’s Tort Trial & Insurance Practice Section.

Contract Provisions in Bond Forms and Project Agreements

  • 9 Things Savvy Owners Should Know About Surety Bonds – This publication provides nine things construction project owners should understand about surety bonds, including: how bonds help manage project risk effectively, the role of surety bonds, types of surety bonds, who regulates surety bonds, statutory bond requirements, surety bond costs, prequalification through surety bonds, contractual requirements for bonds, and how bonds help ensure project success.
  • Why Do Contractors Fail? This piece describes at least six reasons reasons why contractors fail.
  • Always Verify Your Bond! – NASBP developed this document in response to the stated interest of its Members, Associates, and Affiliates for many and various educational materials from NASBP and to help combat instances of fraudulent surety bonds through education. The document, Always Verify Your Bond!, is a one-page tool that surety professionals can give to their clients (and refer to themselves), which sets forth a two-step process to help them verify the authenticity of every contract surety bond before acceptance. The two-step process shows them how (1) to check the authority of the surety to issue the surety bond, and (2) to verify that the surety actually authorized the issuance of the surety bond. January 2014 edition.
  • The Importance of Surety Bond Verification – This article, coauthored by NASBP’s CEO, Mark H. McCallum, and SFAA’s General Counsel, Edward G. Gallagher, is reprinted with permission from the American Bar Association. The article is from the Public Contract Law Journal, Vol. 39, No. 1 Winter 2010.
  • Know Your Bond Before You Sign – This article, coauthored by NASBP’s then General Counsel and Director of Government Relations, Mark H. McCallum (now NASBP’s CEO), and SFAA’s Director of Underwriting and Assistant Counsel, Robert J. Duke, provides insight to certain terms of a bond form, such as language that triggers the surety’s liability, varies the burden of proof, increases the surety’s monetary liability beyond the original penal sum of the bond, limits the surety’s response options, and lengthens the time the surety remains liable. This article was published in the November 2008 issue of Construction Business Owner magazine.
  • Contract Terms and Conditions from a Surety Perspective – This article, coauthored by NASBP’s then General Counsel and Director of Government Relations, Mark H. McCallum (now NASBP’s CEO), and SFAA’s Director of Underwriting and Assistant Counsel, Robert J. Duke, describes how a surety company typically reviews the terms of a construction contract to determine its exposure under a performance bond. This article was published in the June 2008 issue of Construction Business Owner magazine.
  • Getting Directly to the Point of the Contested Matter: Dispute Mitigation & Resolution in ConsensusDOCS Construction Forms – This article, written by the NASBP’s then General Counsel and Director of Government Relations(now NASBP’s CEO), Mark H. McCallum, describes how the ConsensusDOCS forms use a multi-method, graduated approach to defuse project disputes and how their approach precludes a role for the project design professional as initial arbiter, a point of departure from other industry standard form families. The article was published by the American Bar Association’s Fall 2008 Forum on the Construction Industry.
  • The Advantages of ConsensusDOCS Developed Standardized Agreements -This article, coauthored by NASBP’s CEO, Mark H. McCallum, and SFAA’s Associate Counsel, Robert J. Duke, addresses the attributes of the ConsensusDOCS forms that set them apart from other standarized forms. The article was published in the November 2009 issue of Construction Executive magazine.

Miscellaneous

Below are NASBP and other organization’s guides and publications that can assist bond producers, surety underwriters, and contractors with issues they face daily.

  • What Are Surety Bonds? – This document describes how surety bonds on construction contracts provide critical prequalification of a bonded contractor and financial protection for the owner and certain subcontractors and suppliers. Architects who are knowledgeable about bonds are well positioned to advise owners about these premier project risk management tools.
  • What Are Sureties? – This document explains that most surety bonds are written by subsidiaries or divisions of insurance companies, which are regulated by state departments of insurance. Surety companies are authorized and qualified to do business by the state insurance commissioner where they are domiciled and in the jurisdiction where the bond is issued.
  • Who Are Surety Bond Producers? – This document describes how surety bond producers, who are regulated by state departments of insurance, are business professionals who specialize in providing surety bonds to contractors and subcontractors. The bond producer helps position the contractor to qualify for surety credit and plays “matchmaker” between the contractor and the surety company.
  • 9 Things Savvy Owners Should Know About Bonding– Nine concise reasons why surety bonds provide owners peace of mind.
  • Answers to 30 Questions Architects Ask About Contract Surety Bonding – This document explains how an architect who understands the benefits of bonding construction contracts is better prepared to advise owners how surety bonds help ensure successful contract performance and build strong reputations. These 30 Q&As explain the benefits of bonds and how they play an essential role in the construction risk management process.