EXPEDITED DISPUTE RESOLUTION BONDS: WHAT YOU NEED TO KNOW
Did you know that bonds are required to help guarantee performance, payment, and maintenance terms on a project to the owner/obligee? When bonds are in place, everything should run smoothly in the event of the dreaded bond claim right? Wrong. Typically, bond claims can take many weeks, if not months, for a resolution, regardless of the outcome.
The extended delay in resolution can cause project stoppage, incur damages, and extend the final delivery of the project to the owner. Most bond forms don’t specifically address a timeframe or action plan for dispute resolution. Over the last couple of years the surety industry has looked to help in this issue by adopting what is known as an Expedited Dispute Resolution bond, more commonly known as an EDR bond. The EDR’s primary goal is expedite disputes. It defines time frames in which the surety has to investigate, whether performance or payment related, typically in less than 30-45 days. This can help avoid nasty penalties and delays from the owner and it ultimately keeps projects running on schedule as all parties involved are to continue work throughout the process. It’s worth noting that EDR bonds are not right for every project, but if utilized correctly, are a very effective solution for owners, general contractors, and subcontractors in the event there is a claim.
About the Author
Share This Story
Related Blogs
Eric Pach Appointed to Arizona Builders Alliance Board of Directors
Effective 2023, INSURICA’s Captive Leader Eric Pach has been appointed to the Board of Directors for the Arizona Builders Alliance (ABA).
INSURICA Announces New Credit Facility to Accelerate Acquisition Strategy
INSURICA officials announced today a new $150 million credit facility through BMO Financial Group as part of the company’s new accelerated growth initiative, “Transformational Growth Strategy.”
9 Controls to Know this National Cybersecurity Month
October is National Cybersecurity Awareness Month. During this annual event, government and cybersecurity leaders and the insurance community come together to raise awareness about the importance of cybersecurity.