Shining a light on an electrical contractor’s (lack of) business acumen


Not too long ago, one of Guardian’s longstanding surety clients called us regarding one of their bonded contractors, an extremely skilled electrician who had requested bridge financing and for whom they were concerned had overextended his company. Of the company’s 14 bonded projects, one of the largest was a 35,000 s/f facility that utilized a state-of-the-art smart lighting system. The sensor-based lighting system, operating similar to streetlights, stood to garner numerous points toward this municipal facility’s intended LEED status.


Upon notification by the surety, Guardian’s seasoned surety experts deployed to the Southeast property location to inspect both the work in progress as well as the contractor’s books. In addition to demonstrating the technical sophistication required to install the smart lighting, the contractor had also been forced to contend with the relocation of high-voltage lines, due to an integrated commuter rail line. After inspecting the plans and the work, it soon became apparent that this was not a case of an electrical contractor who lacked technical depth and expertise or one who had cut corners. Rather, this was a small husband-and-wife-run company who lacked the business experience to balance the books, manage receivables and cash flow, execute and bill upon change orders, etc. While it had initially appeared the contractor was operating in the black, this proved not to be the case. Irregular accounting procedures, including allocating dollars onto their balance sheet from future litigation recoveries, only added to their confusion.


By recognizing the vast discrepancy between the contractor’s unique technical skillset and his company’s business abilities, Guardian’s surety experts knew it was in all parties’ best interests to convince the contractor to voluntarily default. Yet, owing to his unique skill set, by keeping his company in place and monitoring both the work and the company’s financial condition, Guardian was able to satisfy the obligee and complete the project while simultaneously limiting the surety’s losses. Additionally, Guardian was also able to help overcome such engineering/project hurdles as the effective location of the switch gears. Moreover, when building employees and the owner complained that the system wasn’t operating correctly, Guardian helped provide the user training that helped them overcome their issues. By powering-down the system at the breaker, employees had inadvertently hampered the smart system’s ability to harvest historical data from its sensors and programming, necessary for the system to function intelligently and efficiently.


From large and complex surety claim investigations and project takeovers to small, everyday surety claims, you can always count on Guardian Group, Inc. With over 30 years’ experience, Guardian’s team puts its unique combination of technical construction/engineering expertise and claim resolution know-how to work for sureties, rapidly and cost-effectively resolving their claims and helping them achieve their company’s vision of claim handling success. To discuss a specific claim or to have a broader discussion about how Guardian can prove itself to be an invaluable partner to you, kindly reach out today.


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