Feasibility of longer construction warranties for rehabilitation of pipelines

Thank you for your question regarding surety coverage of longer construction warranties. A lengthy warranty period, such as one equaling or exceeding 5 years, poses considerable problems from a surety underwriting perspective. Sureties usually are comfortable in covering a warranty obligation of up to two years. Durations longer than two years increase substantially the uncertainty regarding projections about the contractor’s future viability. Simply put, sureties cannot gauge the soundness and financial wherewithal of a company for periods extending too far into the future.

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