More municipalities, amateur and pro sports teams are using synthetic turf for parks, athletic fields, green space and more. Unfortunately, these fields can create issues for surety bond companies and contractors installing this turf. Learn more about how bond companies look at bonding synthetic turf projects and what contractors can do to make bonding these projects easier.
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The biggest challenge to bonding synthetic turf projects is the potential for long-term warranties. Often, project owners include long warranty provisions such as 7 years or more in the contract for these spaces. Although these warranties are often standard for the turf manufacturer, surety bond companies do not want to be responsible for long term wear and tear. Contractors also should not be responsible for performing repairs years after the project has been completed.
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Since performance bonds follow the contract, the solution is to remove the labor portion of the warranty from the contract and bond. The contract can still make the turf manufacturer responsible for a long-term warranty without keeping the contractor and bond company on the hook for many years. Usually, a 2-year workmanship warranty can be included for the contractor.
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For many synthetic turf projects, the contract calls for Design-Build delivery. This shifts the risk of design back to the contractor and their surety bond company. Although many contractors subcontract the design to a design professional, that does not completely remove their risk. The contractor is still ultimately responsible for the project. Failure of the design could completely ruin the turf and void any potential manufacturer’s warranty. This damage could easily be in the millions of dollars for some projects and the professional designer may not carry insurance limits high enough to cover the damage.
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Surety Bond companies will want to make sure that either the contractor or its professional designer has experience working with the type of turf specified. Additionally, the bond company will want both the contractor and designer to carry professional liability insurance if Design-Build delivery is specified. Additionally, contractors should expect a higher bond rate for Design-Build projects to offset the additional risk to the bond company.
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One of the biggest risks when installing turf is proper irrigation. On many larger turf projects, the grading and/or drainage is subcontracted to another party. If done incorrectly, water and drainage issues can ruin the turf and void the warranty. Turf installers should protect themselves by requiring professional liability insurance from subcontractors. They should make sure the coverage is enough to cover any potential replacement of the turf if necessary and obtain proof through a certificate of insurance.
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The supply chain and labor market are tight for many industries. Only a few manufacturers specialize in making synthetic turf and it may be impossible to find a substitution if a manufacturer cannot meet a deadline. Delays and long lead times could cost turf contractors if these are not negotiated into their contracts. Contractors performing these projects should make sure that turf can be delivered to meet their timelines or that the Owner if flexible with delivery. As many contractors have learned, delay damages can be significant, and it is best to avoid them when possible.
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Artificial turf projects are becoming more common in both commercial and residential applications. Turf fields are projected to grow as project owners and municipalities look for ways to reduce water consumption. Many of these projects require surety bonds. Understanding and mitigating the bond company’s concerns can eliminate problems and make getting these projects easier.
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Axcess Surety is the premier provider of surety bonds nationally. We work individuals and businesses across the country to provide the best surety bond programs at the best price.
