What does subcontractor default insurance protect against?

Subcontractor default insurance specifically protects against financial losses that may arise when a subcontractor fails to meet their contractual obligations. This type of insurance is essential for contractors because it helps to mitigate the financial impact that can result from a subcontractor's inability to complete their work, whether due to bankruptcy, non-performance, or other failures. This coverage allows general contractors to recover some of the costs they incur in finding replacement subcontractors, hiring new labor, or completing the work themselves when a subcontractor defaults.

This coverage does not directly address safety violations, workplace injuries, or project delays caused by weather conditions, as these are managed through different types of insurance and risk management strategies. For instance, workplace injuries would typically fall under workers' compensation insurance, while safety violations might lead to liability claims or insurance involved in accident prevention strategies. Similarly, delays from weather would generally be covered under clauses in contracts dealing with force majeure or other weather-related provisions, but not by subcontractor default insurance.