Bill > H2808

This bill modifies existing Massachusetts law regarding insurance for public construction projects, specifically concerning "trade contracts," which are agreements with specialized contractors for specific parts of a construction job. Currently, these contracts generally require "performance and payment bonds" from licensed surety companies, which are financial guarantees that the contractor will complete the work and pay subcontractors and suppliers. However, this bill introduces an option for the "construction management at risk firm" (a type of general contractor responsible for managing the project and its budget) to use a "subcontractor default insurance policy" instead of individual performance and payment bonds for some or all of its trade contractors. This alternative insurance option must be disclosed to the awarding authority after bids are received, and any trade contractors not covered by this policy must still provide traditional bonds at no extra cost. If a subcontractor default insurance policy is used, trade contractors will provide a credit to the construction manager at risk firm equivalent to their anticipated bonding costs.