BOND AND INSURANCE COVERAGES FOR HIGHWAY CONSTRUCTION CONTRACTORS

This report documents and presents the results of a study to investigate the factors impacting bond and insurance availability and cost for highway construction contractors. Input was received from participants in the highway industry through two surveys, personal interviews, and through literature review. Surety bonds and traditional insurance coverages will continue to be required of highway contractors performing government projects. Contractors with stable financial situations and good performance records will continue to find such requirements of no significant problem. An exception to this will be the difficulty in obtaining coverage for hazardous waste projects. Small and minority contractors will continue to have a difficult time obtaining traditional surety bonds, with lesser difficulty with insurance as long as they have good performance and safety records. There are several options for minority contractors to seek government assistance for bonding. Seventeen recommendations were developed for possible implementation to alleviate current bond and insurance problem situations, nine for bonds and eight for insurance. Eleven specific research problem statements were developed, including scope, estimated cost and duration. Six problem statements were identified in the bond area and five in the insurance area.