2020 Marcum Northeast Ohio Construction Survey

2020 MARCUM NORTHEAST OHIO CONSTRUCTION SURVEY

BY LOU COLAGROSSI | ASSURED PARTNERS OF OHIO, LLC Bonding Considerations During COVID-19

If ever there were a time for contractors to be overcapitalized, now is that time.

Bonding companies will want to know and understand how COVID-19 is impacting your operations. For example, if you are performing private work, has the pandemic had a significant impact on your client’s ability to pay? If you or your subcontractors have had projects delayed, there may be a ripple effect when projects start or restart if crews are tied up with other projects. Additionally, supply chain issues are starting to surface, which further impacts schedules. Contractors who rely on their bank lines of credit to operate also could be vulnerable, should their lending institution decide to reduce their exposure to the industry, further complicating your ability to perform. Going forward, there should be more scrutiny over the contracts being bonded. Who’s responsible for the added cost to shut down a project and ensure the site is safe and secure on a temporary basis? We have seen onerous clauses being added, making the contractor responsible for any/all costs as a result of COVID-19 impacts on the project. Have your legal counsel and your bonding company review your contracts before you sign them to assure you are not falling prey to one of these unknown risk factors. Increased communication with your bonding company, bank, and legal team is the best approach in maintaining capacity during these uncertain times.

Lou Colagrossi Vice President/Producter , AssuredPartners of Ohio, LLC 440.895.6387 | lou.colagrossi@assuredpartners.com

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Going forward, there should be more scrutiny over the contracts being bonded.

- LOU COLAGROSSI

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