A general contractor uses Subcontractor Default Insurance (SDI) instead of requiring performance bonds from enrolled subcontractors. A framing subcontractor defaults mid-project, and the GC incurs $900,000 in completion costs and delay damages. The SDI policy has a $1,000,000 per-default limit with a 10% co-investment (first-loss) by the GC. How does SDI differ fundamentally from a performance bond in the GC's recovery process, and what does the GC net?
