Bonding subcontractors and requiring subcontractor bonds are important tools in protecting the GC’s investment in a project in today’s challenging economy. As prices continue to increase and skilled labor is increasingly hard to find, managing the risks of subcontractor default is more important than ever.

NASBP Producer Communications Toolkit 2.0 offers bond producers multiple resources to share with their prime contractor clients that highlight the circumstances when it can be to the GCs advantage to bond subcontractors or to require subs obtain subcontract bonds. Additional NASBP resources describe how GCs can build stronger sub relationships.

 

The Importance of Bonding Subcontractors and of Subcontractor Bonds

Why GCs Should Bond Back Subs
This NASBP Surety Bond Quarterly article reinforces the importance of bonding subcontractors to protect the GC’s investment in the project.

 

 

 

 

When Should a General Contractor Require Subcontract Bonds?
This article offers some questions that GCs should ask when considering subcontractor risk. It also highlights the importance of subcontractor prequalification, which helps GCs feel confident in their subcontractor choice. There is also a brief review of what happens if a subcontractor defaults.

 

 

Subcontract Bonds: Four Times When General Contractors Need Subcontractor Bonds
This article describes four instances when a GC should require a subcontract bond on a project. These include when the work is unique and requires special skills, when the work includes design risks for the GC, when there are concerns about the subcontractor’s financials, and when the GC needs expanded capacity.

 

Surety Story Video: Hensel Phelps Construction
This video shares a GC’s perspective on the importance of subcontract bonds. The contractor notes that any problem on the project is the GC’s problem; with a subcontract bond, the performance is guaranteed. The GC relies on that to ensure the subcontractor’s work will be completed.

 

 

Building Strong Subcontractor Relationships

Trust But Verify: Prequalifying Project Owners and GCs
Help GC clients know that while they prequalify their subcontractors, the subs should also be prequalifying their GCs. This NASBP Surety Bond Quarterly article describes how contractors can prequalify project owners and how subcontractors can prequalify GCs. The surety can assist with information to help ensure the principal will be paid fully and on time. The article also includes a link to a webinar on this topic.

 

10 Tips to Improve Construction Site Project Communications
This article is easy to share with all contractor clients, as it lists practices to ensure effective communication on the jobsite and between all construction project stakeholders.

 

 

 

 

Building Success: Key Practices for Small Construction Contractors
This NASBP Surety Bond Quarterly web exclusive article focuses on four best practices for small construction contractors. A great resource for GC clients to share with small subs.