Rescue From Subcontractor Financial Failure

surety bonds nj

Your firm may have a lot of influence and muscle, but it’s vital to keep a project on track when something goes awry with an outside business that you’re relying on. Surety bonds in NJ provide the backing needed to help your company follow through on its promise rather than allow construction to grind to a halt. Consider some surprising facts about a subcontractor that started to experience financial difficulties during an important job:

  • $24 million subcontract for concrete and reinforced steel work
  • Material costs completely covered by the primary contractor
  • Despite the lack of material cost, the subcontractor couldn’t continue making good on payroll and other bills

Without surety bonds in NJ, the outcome could have been tragic. But notice how the insurance provider jumped in to prevent project abandonment:

  • Surety provided cash advances to pay for critical bills
  • Even so, within about a week, it was clear that the original subcontractor still couldn’t sustain operations
  • A new firm was selected and hired to do the specialty work
  • $3 million was provided, partially to fix defective work done by the previous company

Nothing has to stop your company from following through on its commitments to keep its great reputation and win future bids. As seen in this example, the insurance payout was generous, shielding the primary contractor from high unexpected costs.

Insurance Risk Advisors