b'LEGAL COLUMNcontractors business and determining their risk of insolvency. Insolvency of a bondedWHEN IN DOUBT, HAVING A LAWYER contractor is the greatest risk to a surety, so surety professionals are adept at analyzingASSIST IN MAKING CLAIMS AND NAVIGATING that risk. Further, once a surety begins aA BOND WHEN A PRINCIPAL APPEARS TO BE relationship with a contractor, they will often bond all of that contractors projects.GOING INSOLVENT CAN HELP PROTECT YOUR They will use their ongoing relationship and knowledge of the contractors business toRIGHTS AND LIMIT THE RISK OF VOIDING constantly assess risk and will refuse to bondA BOND OR MISSING A DEADLINE.a project, or charge an increased cost, where they see that a contractor may be stretching themselves too thin or bidding too low.Further, bonding companies secure themselves against a principals risk of insolvency by requiring indemnities from the owners of that principal. This aligns the interests of the owners with the interests of the principal, ensuring owners dont walk away from the table when theyve been dealt a bad hand.Finally, bonding companies have significant expertise in the construction market. If a contractor begins to show signs of inability to complete a job, sureties can use their experience in the industry tostep in and ensure the contractor finishes the contract, or to smooth the transition from the insolvent contractor to a completion contractor.COMMON MISTAKESEnsuring a contractor is bonded is not a complete defence to all insolvency risks. A common mistake made by obligees is, when a principal starts showing signs of going sideways, to start working outside the express terms of a contract to help nudge the struggling contractor along to completion. Even something as innocuousAPPRENTICE HIRING PROJECTas making an advance on a contract can prejudice a surety and nullify a bond.HIRE AN APPRENTICEWhen working with a bonded contract, it is critical to rigorously work within theEARN UP terms of the contract and, when in doubt, to confer with the surety when a principal is flagging. TO $20KFurthermore, a bonds terms must be strictly followed. There are critical provisionsFIND OUT HOW:regarding notice and deadlines for making claims that may void a bond altogether okanagan.bc.ca/ahpif breached. 250-762-5445 ext. 4479When in doubt, having a lawyer assist in making claims and navigating a bond when a principal appears to be going insolvent can Funded by the Government of help protect your rights and limit the risk ofCanadas Apprenticeship Servicevoiding a bond or missing a deadline.SICA CONSTRUCTION REVIEWSpring 202339'