Subcontractor Default Insurance Calculator

SDI substitutes for individual sub bonds.

GC contract value

Sub contract aggregate

SDI rate %

Individual bond rate %

SDI savings vs bonding

$300,000

SDI cost

$600,000

Individual bond cost

$900,000

How the math works

SDI cost = sub value × SDI %. Bond cost = sub value × bond %. Savings = bond − SDI.

$60M × 1% = $600k SDI. vs $60M × 1.5% = $900k bonds. $300k savings.

How to Use

Enter GC contract value.
Enter sub contract total.
Enter SDI rate %.
Enter individual bond rate %.
Read SDI cost and savings.

Frequently Asked Questions

SDI vs bonding?

Subcontractor Default Insurance: GC buys one policy covering all subs. Single deductible typically $500k-$2M. Alternative: each sub posts individual bond (1-3% of sub contract). SDI cheaper in total + simpler — no bonding every sub.

Typical cost?

0.5-1.5% of aggregate sub value. $50M sub work × 1% = $500k premium. Individual bonds: $50M × 1.5% = $750k aggregate. SDI saves ~$250k + admin cost of bonding every sub. Common on projects >$20M.

Drawbacks?

Single deductible exposure ($1M+). Requires strong GC sub qualification process (insurance carrier demands). May not include smallest subs. Requires claims management capability at GC. Generally wins economics at scale.

How does this affect my portfolio-level metrics?

Single-asset impact rarely matters in isolation for a portfolio of 20+ assets, but systematic patterns do. If the same issue shows up across 10% of your portfolio, the aggregate impact is meaningful. Track this metric at the portfolio level quarterly. Institutional operators aggregate these monthly into a KPI dashboard for investors and lenders.