Group: Subcontractor default insurance shouldn't replace performance bonds

03/27/2013 | Journal of Commerce (Canada)

Some contractors say subcontractor default insurance can be used as a substitute for surety bonds, but this isn't the case, according to the president of the Surety Association of Canada. Such policies aim to shield general contractors from the risk of default by subcontractors, but "[n]owhere is protection afforded to third parties, such as owners, sub-trades or suppliers," according to a report by the group.

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