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Clearing Up Confusion on Contractual Liability

The commercial general liability policy includes contractual liability as a standard feature, but contractual liability can be a misunderstood term. It sounds like what would arise from a breach of contract, but most liability policies specifically exclude damages resulting from a breach of contract. Instead, contractual liability covers an insured for a contractual agreement to assume the liability of a third party. The most common form of this type of agreement is an indemnification or hold harmless agreement.

Avoiding A Risky Position: Hold Harmless In Contract Negotiations

Liability rolls downhill. Big companies use their negotiating leverage to demand favorable indemnification clauses and hold harmless agreements be included in their vendor and customer contracts. Some degree of this is reasonable, but there are always a few players who try to push things as far as possible. The result is indemnification and hold harmless provisions that seem to foist all the liability on companies with less leverage without regard to fault or negligence. Many go so far as to seek that the second party indemnify the first party for the first party’s own negligence.

How An Indemnification Clause In A Contract Can Causes Problems For Your Business

Risk transfers are a vital aspect of any comprehensive risk management plan.  Theoretically, those in the best position to avoid a risk should always bear responsibility for the risk.  The real world does not work that way, unfortunately.  Oftentimes, larger companies and larger contractors use risk transfers to try and push liability “downhill” – onto the backs of smaller companies with less negotiating leverage.

Contracts And Additional Insured Status [Understand Your Risk]

 

 

Contracts in some industries, especially construction, often require an additional insured endorsement as part of the contract’s insurance requirements. This normally takes the form of the general contractor requiring a subcontract to list the general contractor as an additional insured on their general liability policy, as well as others. Because of these requirements, many general liability policies offer a blanket additional insured endorsement for any entity required to be added as an additional insured by a written contract. The language used in these contracts and endorsements can have far-reaching consequences and failing to understand them can cost companies millions of dollars.

How A Waiver Of Subrogation In A Lease Could Work Either For Or Against Your Business

.Often times, companies are more focused on the more fundamental aspects of a contract, like price and timelines for completion of tasks. They may overlook some terms that seem more like blanket or form language- but this is where the phrase "the devil is in the details" comes to mind.

Will Your Insurance Policy Cover Risks From Indemnification Clauses?

Indemnification clauses in commercial contracts can present a number of potential issues.  When the parties to the contract do not properly think through or write out indemnification provisions to address these issues, it can lead to costly and dangerous unintended consequences.  Companies need to think through exactly what they mean when they seek indemnification from a contracting party and ensure their approach to indemnification issues comports with their approach to their insurance coverage.

Construction Defect Litigation And What It Means To You

 

Construction defect litigation proves to be a significant and expensive problem across the United States. Numerous commentators have blamed liberal construction defect laws for slowing down housing construction in certain hot real estate markets.

Damaged Structures Uncover Fractured Insurance Coverage

Building Ordinance coverage is a vital but often overlooked area for property owners. The events that trigger this type of coverage can be obscure, but its absence can be catastrophic.

P&C Construction: Olivet Management LLC

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Olivet Management, LLC, a New York real estate management company, was recently fined over $2.3 million for knowingly exposing its employees and contractors to asbestos and lead hazards during cleanup operations in preparation for potential investors touring one of its properties.