Maximum security: how we helped free a surety from a prison construction bond claim


On this performance bond claim, our surety-client had written a bond for which the obligee stood as one of our country’s largest and most respected general contractors and the principal served as the company’s concrete subcontractor. As you can imagine, a maximum-security facility incorporates a substantial amount of concrete, and the concrete work on this portion of the expansion amounted to a quarter of a million dollars. This federal prison construction project, located in the Midwest, included masonry walls, sidewalks, and slabs.


Upon notification by our surety-client, Guardian Group’s seasoned surety claim investigation experts rapidly reported to the prison for a complete investigation, adhering, of course, to all security protocols set forth. Guardian’s team also met with key personnel from the obligee’s company to further establish what had occurred and to establish a solid rapport with the general contractor’s team. In addition to an on-site assessment that illustrated scoped work wasn’t even 50% complete, Guardian’s construction and engineering experts took note of the inherently challenging construction environment. Whether via project takeover or tender, working effectively inside a penitentiary would include addressing not only wide-ranging construction crew and inmate safety and security issues but also the additional challenge of limited work hours – construction could take place on weekdays and during daylight hours only.


Rather than assume project takeover responsibilities, as the surety anticipated Guardian might, Guardian advised the surety that its best path forward would be via a tender agreement, if one could be reached. This would serve to cap the surety’s losses and mitigate risks, and it was due, in part, to any latent defects and potential warranty claims that could arise in the future. Upon obtaining the permission of both the surety and the obligee, Guardian solicited 5 bid packages, identified the most qualified candidate, and negotiated the contract. Due to the quality of the relationships built, Guardian was able to effectively reason with the obligee, ultimately helping the company see the merits of a “check and release” bargain. Though the surety did, in fact, take a loss on this bond, that loss was drastically reduced, and the surety credited Guardian’s expertise, rapid response, strategic counsel, and the negotiated tender agreement for mitigating their losses and their future risks so substantially.


 For over 30 years Guardian Group, Inc. has helped sureties resolve their claims rapidly and cost-effectively. Providing sureties as much or as little support as may be required, no matter where or when it is needed, Guardian’s unique combination of technical construction and engineering insight and complex claims investigations experience helps sureties meet their claims handling objectives. Kindly call on Guardian Group, Inc. today.


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