22 Nov, 2019

A Bond is NOT Insurance

2019-11-22T09:23:13-06:00November 22nd, 2019|Bond Claims, Construction Contractor Advisor, Insurance coverage, Nebraska Construction Law|

There are fundamental differences between insurance and surety bonds and knowing the difference will help you avoid making mistakes, should claims arise.  This blog will discuss the differences between insurance and surety bonds. Insurance An insurance policy is a two party contract between an insurer and the insured.  The policy is intended to protect the insured.  The cost of insurance is calculated by the insurer based on how many claims [...]

25 Jun, 2019

Bond Claims on Public Projects–Getting it Right

2019-06-22T08:48:19-05:00June 25th, 2019|Bond Claims, Construction Contractor Advisor|

Ever get that sinking feeling on a public project that you might not get paid?  The good news is that in Nebraska, general contractors working on a project in excess of $15,000, must file a bond on the project.  This blog will address how to make a proper claim on the bond. The process for making a bond claim is found in section 52-118.01 Neb.Rev.Stat.  The process and time frame [...]

20 Jun, 2017

Don’t Get Caught Holding the Bag: Hold the State Liable When General Contractor Fails to Pay on a Public Project.

2019-03-12T09:20:02-05:00June 20th, 2017|Bond Claims, Breach of Contract, Construction Claims, Construction Contractor Advisor, Construction Law, Government Contracting, Lien Rights, Midwest Agricultural Law, Nebraska Construction, Payment Bond|

According to a quick Google search the term holding the bag" comes from the mid eighteenth century and means be left with the onus of what was originally another's responsibility.  Nobody wants to be left holding the bag.  But that is the situation our client (subcontractor) found themselves in when upon completion of a public project the general contractor went out of business before paying the remaining amount due and [...]

4 Oct, 2015

The Importance of Providing Notice to a Surety

2018-04-23T23:55:10-05:00October 4th, 2015|Bond Claims, Construction Contractor Advisor|

A recent case out of Missouri emphasizes the importance of providing notice to a surety when a bonded subcontractor is in default.  When the question of whether a surety will be obligated under the bond is in the balance, notice is crucial. In CMS v. Safeco Insurance Company, Safeco provided a performance bond to a subcontractor for the benefit of CMS.  The bond specifically provided: PRINCIPAL DEFAULT. Whenever the Principal [Subcontractor] shall be, [...]

19 Nov, 2014

What Personal Assets Have you Pledged to your Bonding Company?

2018-04-23T23:55:12-05:00November 19th, 2014|Bond Claims, Construction Contractor Advisor|

What are your personal obligations? The demise of Truland Group, an electrical contractor on the east coast, raises an interesting question as to the extent of an owner’s personal liability to the bonding company. As has been revealed in the litigation surrounding Truland’s fall from grace, it is far from clear which of the owner’s assets may be seized to reimburse the bonding company for payments on projects. [...]

18 Mar, 2014

Iowa Subcontractors Rejoice—IDOT Has to Cover GC’s Shortfalls

2018-04-23T23:55:14-05:00March 18th, 2014|Bond Claims, Construction Contractor Advisor|

Iowa subcontractors convinced the Iowa Supreme Court that the Iowa Department of Transportation ("IDOT") should cover unpaid balances the general contractor owed to subcontractors. Although this ruling will only apply to situations where the IDOT has waived the bonding requirement for certain contractors, it’s still a great win for subcontractors. This case, Star Equipment v Iowa,  involved the construction of a roadside rest area along Interstate 80. Universal Concrete was [...]

3 Dec, 2013

When Bond Claims Don’t Work

2018-04-23T23:55:16-05:00December 3rd, 2013|Bond Claims, Construction Contractor Advisor|

Sometimes a subcontractor is just too far down the chain to make a claim on a bond. A recent Kansas cases illustrated that a sub-sub-subcontractor was not a claimant under a subcontractor’s bond and its claim was denied. I wonder if anyone looked at the bond to see which entities it would actually cover before the problem arose. In Dun-Par Engineered Form Company v. Vanum Construction Company, the job involved [...]

9 Oct, 2012

Compliance is Key–Proving your Bond Claim

2012-10-09T16:36:08-05:00October 9th, 2012|Bond Claims|

Bonding companies can make it difficult to pursue your claim.  You need to follow the langauge in the bond to preserve your claim.   This blog discusses what you need to prove to prevail on a bond claim and the defenses that a bonding company may raise to your claim. First, what do you have to prove to prevail on your bond claim? A payment bond for the project was executed [...]

27 Sep, 2012

Making a Claim on a Payment Bond

2012-09-27T07:57:07-05:00September 27th, 2012|Bond Claims|

Isn’t it comforting knowing that the project you are working on has a payment bond to make sure you get paid? Perhaps. But, getting the bonding company to pay your claim is often times difficult. Let’s review the steps to pursue payment. First, get a copy of the bond. Ideally, you received a copy of the bond when you received the signed contracts from the general or the owner (you [...]

1 May, 2012

Are you Communicating with Your Bonding Company about Claims?

2012-05-01T14:50:01-05:00May 1st, 2012|Bond Claims, Construction Law|

How well do you communicate with your bonding company when you receive notice of a claim? A recent case out of Indiana highlights the problems that can occur if you do not investigate the claims and timely report back to the bonding company. In this case, the bonding company was contacted by various subcontractors demanding payment. The bonding company called the contractor to investigate the claim. It took several weeks [...]

20 Mar, 2012

Public Project Bond Claims in Iowa are Tricky–Do you Know your Deadlines?

2012-03-20T08:55:47-05:00March 20th, 2012|Bond Claims, Construction Lien, Government Contracting|

For those of you working in Iowa, beware of the time limits by which you must make bond claims.  On public works projects in Iowa, you have a very limited window to make your claim and the process can get even more complicated if the contractor abandons the project.    Iowa’s statute on public works bonds provides that general contractors must pay subcontractors within seven days of payment for the subcontractor’s [...]

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