Recently, a Guardian Group client phoned into the Surety Group with a pressing matter. Amid the construction of a prefabricated church, the surety (rightfully) feared that their bonded general contractor was financially failing and seriously delayed.
Rapidly deploying to the construction site, Guardian’s surety claim expert was shocked to see that while 96% of contract funds had been exhausted, project completion was barely more than 50%. Some examples of the site conditions that were noted: the building had not been climatized, electrical work was still at rough-in, no flooring throughout the church, plumbing fixtures not set, etc. There were also multiple instances of undocumented, un-billed change orders. An entire balcony structure had been built, for example, even though it didn’t appear on plans and was never paid for by the owner.  The HVAC design was still undergoing design changes, and for none of these was the contractor being compensated.  A quick look into the contractor’s so-called books (a box, really) revealed: bookkeeper had no experience with keeping a basic ledger or project accounting, and many subs had only verbal agreements (leaving the door open to fraudulent mechanic liens).
Even worse, unpaid subcontractors had begun unlawfully removing materials from the site. Guardian’s experienced claim consultant expeditiously summoned a locksmith. (Many subs later submitted payment bond claims for materials they had removed, however inappropriately.) While the church had its hopes pinned on an Easter grand opening, in the estimation of Guardian’s expert project completion looked more like mid-summer. Construction was that far off course.
Due to these issues – significant impairments, the lack of any real project management, the commingling of contract funds with other projects, among others – the surety chose not to complete this project and to proceed with arbitration. Though this is uncommon (often a surety better controls its destiny via completion), on this claim the bolder choice was indicated. In addition to Guardian’s identification of some equipment that could be, and later was, auctioned off, the job status report, the incomplete work highlighted therein, the extra-contractual work demanded by the owner, and the deposition provided by Guardian’s expert helped resolve the matter with a payment that was less than 1/8th of the demand. The surety was grateful for the experience and diligence Guardian’s claim investigator brought to bear on the claim.
Money matters, time matters, and your exposure matters. All of which means experience matters most when it comes to resolving your surety claims quickly, cost-effectively, and confidently. For over 30 years, Guardian Group, Inc. has helped the industry honor its commitments while managing its risks, streamlining its processes, and enhancing its efficiencies. From small, everyday contract and commercial bond claims on up to some of the most complex, problem-ridden construction in the world, Guardian Group, Inc. couples proven technical proficiency with industry-leading claims investigation and administration capability. So you can resolve claims wisely and rapidly. So you can achieve your vision of claim handling success. Kindly call on Guardian Group today.