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Construction Risk Partners

subguard insurance

Subcontractor Default (SDI)

The impact of a subcontractor default can cause a significant problem to the overall budget and schedule of a project. Subcontractor Default Insurance (SDI), often referred to by Zurich's branded name Subguard, is an insurance product that is utilized by sophisticated and well-managed general contractors to manage subcontractor default risk. The insurance program is purchased directly by a prime contractor to protect itself against the financial impacts of a subcontractor default. It is the belief of the insurance markets offering this coverage, and the contractors utilizing this program, that prime contractors are in a better position to select qualified subcontractors and remedy a default in the best interest of a project. SDI puts the prime contractor into a position to proactively manage subcontractor issues without limiting coverage in the ultimate event of a default. Prime contractors that implement strong operational practices around subcontractor prequalification, subcontractor management, quality control programs, and subcontractor default loss control stand to benefit from the implementation of an SDI program.

We believe that in order to truly implement a successful SDI program, it is critical to implement that program with well-defined operational practices. We work with our clients in an effort to ensure that all parties understand the implications of an SDI program and are positioned to manage it effectively. This approach includes understanding our clients' operations and working with them to customize an approach that ensures efficient, but effective subcontractor prequalification and management practices, while also ensuring the best coverage and program structure available in the marketplace.

The SDI team at CRP has structured a significant percentage of all active SDI programs nationally and has the experience, expertise, and market knowledge to ensure our clients have the most "cutting-edge" programs available. This includes operational practices, coverage enhancements, program structures, and supporting technology. We know what challenges can arise within an SDI program and how to address them before they become issues. With CRP, you are ensured that your SDI program is the best available in the marketplace and that you have the ongoing support to ensure a successful outcome.