When it comes to subcontractor default insurance (SDI), NFP takes a different approach than most brokers. We focus on total risk profile as opposed to simply prequalification. It's not that we don't think prequalification is important - we certainly understand the value of a thorough prequalification process - but because the SDI product is the backstop to a potentially catastrophic balance sheet risk, a risk that generates exposure above and beyond what a well-performed prequalification alone can capture, we like to focus on the total risk associated with utilizing a specific subcontractor.
The total risk profile, developed for each subcontractor partner, is a continuously adjusted rating that measures the subcontractor's performance and is available to all parties within the construction manager's or general contractor's organization.
Where Subcontractor Default Insurance Management Lives
There are several places within an organization where oversight of the subcontractor default insurance program can live. We have seen successful programs managed by risk managers, chief financial officers, general councils, and heads of procurement or preconstruction departments. The one underlying theme we have identified in every successful program we have been involved with is strong communication across all disciplines, which is built upon a solid foundation of processes and procedures. We all know it's no easy task to achieve buy-in across an entire organization. The key is for each respective group to have a voice in developing the processes and procedures that will be used to measure performance.
Enhancing Existing Risk Management
Many construction managers and general contractors already have a process to identify risk, employ mitigation techniques, develop and implement action plans, monitor performance, and audit/verify results. Without this, the organization has very little chance of sustained profitability.
NFP works alongside its clients to enhance their existing risk management processes and procedures, ensuring they meet the best-in-class standards, all while preparing them for a successful underwriting process. We take a hands-on approach to maximize our client's ability to utilize existing resources, from technology systems to personnel, while also leveraging our extensive access to third-party resources as needed.
Enhance your risk management with NFP's comprehensive SDI approach. Focus on total risk, not just prequalification. Partner with us today to ensure your subcontractor choices are thoroughly evaluated and your financial stability is safeguarded!
Connect with us today by finding an office or NFP Professional near you.