Expedited Dispute Resolution: A Different Kind of Performance Bond
Travelers meets performance bonding needs and offers a performance bond called an Expedited Dispute Resolution (EDR) bond. An EDR performance bond includes a contractually determined maximum period for responding to or disputing a claim. In other words, claim processing is expedited compared to the claim process for a typical performance bond.
The key benefit of an EDR performance bond is that it combines the coverage of a standard performance bond and also minimizes project disruption; it also helps avoid costly delays by allowing work to continue during claim processing or a dispute. Our streamlined claims-handling and adjudication process resolves disputes within 45 days and offers up to a 100% performance guarantee. An EDR performance bond is available for projects in the United States and Canada.
We help you manage risk with contractor selection, project prequalification and ongoing monitoring. When claims do arise on a construction site, quick resolution can save the schedule, the budget and your reputation. With a Travelers EDR Performance Bond, you can be confident that your construction project will stay on track.
What Is a Performance Bond?
A performance bond is a surety bond that protects the project owner (the obligee) in the event the contractor (the principal) defaults on its obligations under the bonded contract. An EDR performance surety bond is a hybrid performance bond that combines the coverage of a standard performance bond but also fast-tracks claims processing, which can minimize project delays should a claim be disputed.
What's Different About the EDR Performance Bond?
- Direct access to the Travelers Claim professional dedicated to your project.
- Limits available up to 100% of the contract price.
- Coverage includes liquidated damages and warranties as specified in the contract.
- Optional advance payment coverage rider.
- First bond of its kind to receive the same liquidity credit from Standard & Poor’s as a 10% letter of credit*.
* In 2014, a contractor received a 10% liquidity credit on a large construction project using the Travelers EDR Bond.
Who Is This Right For?
- Public private partnerships
- Private construction owners
- Engineering, procurement and construction (EPC) contracts
- Capital project managers in technology, energy, industrial or manufacturing
- Construction projects with tight time frames/private financing
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How to Get an EDR Performance Bond
If your obligee requires that you secure an EDR performance bond, they will specify the amount of the bond. You can then contact your independent agent to understand how to apply for the EDR performance bond. Your agent, working with Travelers, will guide you through that process, which will include:
- Evaluation and qualification – You will provide financial documents to illustrate your creditworthiness and that you have the resources to fulfill the terms of the bond. You will also provide details about the project that will be covered by the bond.
- Underwriting – Travelers will assess the risk to bond you and, if approved, create the bond agreement.
- Bond issuance – The bond will be issued for you to sign, agreeing to the terms of the bond contract, including the repayment terms.
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