Every ten years the American Institute of Architects (AIA) updates its contract documents to address changes in the industry. With the last document changes made in 2007 it came as no surprise when the AIA issued new base documents in May 2017. One of the biggest and most significant changes to the documents for the surety industry was the removal of article 11 from contract A201-2007, this article covered the insurance and bond requirements of contractors.
The New Insurance and Bond Exhibit
The insurance and bonding requirements have been relocated from the single article in the main contract to a much more thorough seven-page exhibit agreement, which can be used as an addition contracts if required. This relocation is beneficial in a number of ways. First, it improves the flexibility of the contract by giving additional options and checklists to be worked through. Second, it makes the bonding and insurance requirements much clearer enabling all parties to consider their insurance and bonding options in more detail. The addition of the exhibit should allow for a much more tailored approach to outlining contract bonds to protect all parties involved.
Defining Detailed Bond Requirements
The insurance and bonds exhibit gives the parties involved the opportunity to define the exact bonds required as part of the contract. To do this it provides space for information on both payment and performance bonds, including the amount needed for each of these bond types. It also clearly outlines that the contractor must provide a surety bond from a surety authorized to operate in the state where the construction project is located. This detail helps make bond requirements as clear as possible for all parties!
What does this mean for your business?
These updated documents will actually make it easier for your business to understand the bond needs of each contract. It will also ensure that all parties understand and agree on the bonding requirements needed to comply with the contract terms.
Get the bond you need to comply with the new documentation
If you’ve recently signed a contract that contains the new insurance and bond exhibit, our team of licensed bond agents can help you get the bond your business needs to comply with bond terms! Viking Bond Service is licensed in all 50 states and has many years of experience helping businesses secure contract bonds. Call our team today to discuss your bonding needs; we can help you find an affordable bond to cover your next construction project!