Subcontractor Performance Bond

The SAC Headstart Subcontractor Performance Bond, or “Headstart”, is an innovative solution to the multitude of problems that can beset a general contractor when faced with the default of a subcontractor.  Completing the work of a defaulted trade can be challenging and expensive and any additional costs must be borne by the general contractor.  What’s more, these risks are typically compounded by costly delay damages that can pile up while the general contractor is scrambling to engage a replacement subcontractor to finish the uncompleted work.

When a general contractor is faced with a subtrade default, it needs to get the work restarted in very short order.  Unfortunately, traditional surety arrangements do not lend themselves well to this need for a fast-tracked resolution.  Under a conventional approach, the surety is required to fully investigate any declaration of default; a process that can be time-consuming, leaving general contractors frustrated and looking for more responsive solutions.  For several years the void was filled by alternative products such as subcontractor default insurance.  No longer.  The surety industry has now responded with the development of Headstart.  Created and introduced by The Guarantee Company of North America in 2014, Headstart recognizes the importance to the general contractor (obligee) of minimizing project delay with a speedy project restart in the event a subcontractor is not in a position to complete its subcontract. 

In April 2016, The Guarantee agreed to transfer the ownership of Headstart to the Surety Association of Canada for implementation as an industry-wide solution.  This product is available from sureties that are members of SAC.  

To find out more about the SAC Headstart Subcontractor Performance Bond, please visit our Headstart FAQ page.

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