Subcontractor default insurance helps contractors primarily to:

Subcontractor default insurance serves as a safeguard for contractors, primarily protecting them from financial losses caused by the failures of subcontractors to fulfill their contractual obligations. When a subcontractor defaults—whether due to financial instability, lack of performance, or failure to meet deadlines—the general contractor can incur significant costs and delays. Subcontractor default insurance mitigates these risks by providing financial compensation that can be used to cover the costs associated with finding a replacement subcontractor and any additional expenses resulting from the default.

While this type of insurance may indirectly lead to other benefits, such as potentially reducing overall project costs in the long run by minimizing the financial impact of subcontractor failures, its primary focus is on the protection aspect. This insurance allows contractors to maintain project stability and ensures that they can proceed without absorbing the full risk of a subcontractor's failure. Thus, the primary role of subcontractor default insurance is to provide a financial safety net, making it a vital tool in the risk management strategy of any commercial contracting operation.