CFMA South Florida Meeting
January 15, 2025

7:30am - 9:30am

Subcontractor Default Insurance (SDI) is a risk management tool that protects general contractors and construction managers from losses caused by subcontractors failing to perform their work. SDI can help contractors avoid the negative impacts of subcontractor failure, such as:

• Project delays
• Increased costs
• Damaged reputation
• Rework
• Resequencing
• Subcontractor replacement
• Extended overhead
• Liquidated damages
• Claim preparation expenses

SDI offers several benefits over surety bonds, which protect the project owner from a general contractor defaulting:

• Control SDI gives general contractors more control over subcontractor risk mitigation. For example, general contractors can prequalify subcontractors instead of the surety company.
   
• Final call General contractors can make the final decision on whether a subcontractor has defaulted.
   
• Claims process General contractors can start the claims process if a subcontractor defaults