SubGuard Product		Traditional Bonds
1.	Definitions are vague or non-existent	1.	Terms and conditions generally are understood
2.	No legislative support	2.	State and Federal legislative support
3.	Untested in courts - no precedents	3.	Long history of case law clearly established
4.	Deductible and co-payment required before coverage is activated	4.	Coverage applies from first dollar
5.	Insured pays losses then tries to recoup	5.	Surety pays losses
6.	Insured takes over project and manages defaulting owner's obligations	6.	Surety may be called upon to take over, or otherwise arrange for, performance of contract
7.	Insured is responsible for gathering financial information and determining which subcontractors/suppliers are acceptable	7.	Surety provides underwriting and pre-qualification
8.	Coverage can be voided if procedures are not followed or if incorrect information is developed	8.	Once executed, a bond remains in force
9.	Policy can be canceled by the insurance company	9.	A bond cannot be canceled
10.	Insured commits to a 3 to 5 year term	10.	Owner not locked into an ongoing agreement
11.	Questionable degree of risk transfer	11.	Risk of contractor default transferred to surety
12.	Insured must pick an aggregate limit of liability and hope it is sufficient	12.	Owner can elect to have performance and payment bonds each equal to 100% of the contract price
13.	Insured is prohibited from disclosing existence of insurance contract to subcontractors/ suppliers	13.	Subcontractors are responsible for procuring their own bonds
14.	Administrative burden on prime contractor to secure financial information, review it and determine acceptability	14.	Minimal administrative burden: Set bond requirements and make sure subcontractor complies
15.	Claims-made policy (requires claims to be made during the policy period) - defective work discovered after the policy expires or is canceled would not be covered	15.	Bond continues to provide protection against legitimate claims until time for filing a suit as stipulated in the contract, bond or statute of limitations runs out
16.	Owner presumably could incur a concentration of risk with a potential unfunded liability which may require a CPA to footnote the audit	16.	No such condition exists with a bond