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More complex construction risks test surety market

Surety bonds are more important than ever for contractors to ensure projects are completed, but it's still a buyer's market.

By David Hewett | Updated on November 08, 2016
General contractors say subcontractor default is one of their top three risks. But they can mitigate the risk with surety bonds. (Photo: iStock)

The outstanding results of the surety industry over the last 10 years are beginning to make some buyers question the value of surety bonds. However, there are dynamics going on in the construction industry and commercial markets that indicate the need is greater than ever for their use.

For decades, the construction industry did not see the pace of change and productivity gains other industries generated, but this is no longer the case. From Public Private Partnerships (PPP) to alternative delivery methods, including Integrated Project Delivery (IDP), the construction industry is changing rapidly, and projects have become more complex and difficult to build, pushing the construction industry to adapt. But like any industry experiencing increased change, some firms are quicker to adjust than others. 

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