Personally, I prefer to assign the trigger to the date that the bond was
written. Performance bonds do not fit into our notion of a written date, a
uniform period of exposure, and a coverage termination date. The policy term
is a fiction for convenient accounting. The truth is that the obligee will
either perform or he won't. If he doesn't perform, then the exposure is
incurred when the bond is written. Any events beyond that are part of the
Just my opinion.
"Ford, Ed" wrote:
> I would like some advice on this. How is the coverage trigger date
> determined? Is there a common practice? What are the considerations?
> I have heard two answers. One is the report (to the insurer/surety) date.
> The other is the date the obligee "legally" notifies the principal that the
> obligee believes the principal is in default of the contract.
> The choice clearly has an impact on financial reporting.
> Edward W. Ford
> Liberty International
> 175 Berkeley Street
> Boston, MA 01238, USA
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