Subguard Sample Clauses
The Subguard clause is designed to provide insurance coverage or financial protection for a general contractor in the event that a subcontractor defaults on their contractual obligations. In practice, this clause typically requires the general contractor to obtain a Subguard policy, which acts as a substitute for traditional surety bonds and covers costs associated with completing the subcontractor’s work if they fail to perform. Its core function is to mitigate the risk of project delays and financial losses due to subcontractor default, ensuring the project can continue smoothly even if a subcontractor is unable to fulfill their responsibilities.
POPULAR SAMPLE Copied 4 times
Subguard. (a) Subject to the provisions of Section 7.01(b), Developer shall obtain and maintain that certain subguard policy form (the “Subguard Policy”) issued by an insurer selected by Developer and reasonably acceptable to the Coach Member for the benefit of the Building C JV. The Coach Member shall have the right to approve any material amendments to the Subguard Policy, such approval not to be unreasonably withheld or delayed. Developer shall provide the Coach Member with any notice of cancellation of the Subguard Policy it receives from the Subguard Policy insurer within five (5) Business Days of its receipt of such notice. The costs associated with obtaining and maintaining the Subguard Policy shall constitute a Project Cost.
(b) Notwithstanding the foregoing provisions of Section 7.01(a), Developer may, in lieu of obtaining and maintaining a Subguard Policy, obtain or cause to be obtained (i) dual obligee payment and performance bonds for all trade contracts relating to the Developer Work and the Base Building Work a contract amount in excess of Two Million Dollars ($2,000,000.00), which dual obligee payment and performance bonds shall be substantially in the form of Exhibit P attached hereto with a surety company reasonably acceptable to the Coach Member and licensed to do business in the State of New York, as surety, and with, inter alia, Executive Construction Manager, Developer, Legacy Tenant, the Coach Member and the Coach Lender as dual obligees, and (ii) a guaranty in favor of, inter alia, Executive Construction Manager, Developer and Legacy Tenant, from the creditworthy parent entity of Construction Manager with respect to any work that is “self-performed” by Construction Manager or an Affiliate thereof.
Subguard. Construction Manager shall provide subguard insurance for all qualified Trade Contractors.