CONTRACTS WITH YOUR SUBCONTRACTORS – The importance of details

Your contracting risks can be dramatically reduced by making sure that your subcontractors are held responsible for any injury or damages arising out of their operations.  For this to be accomplished, a written subcontract containing the following professionally-drafted elements needs to be in place for every job:

§         Hold Harmless/Indemnity Clause – This requires your subcontractor to indemnify and hold you harmless for any loss, damage or injury, including costs of defense in the event of a lawsuit.

§         Insurance Requirement, including minimum limits – This requires your subcontractor to carry sufficient liability insurance to allow them to protect you in the event of a lawsuit.  You should ask for minimum limits not less than those provided by your own insurance policy.

§         Additional Insured Requirement, including certificates of insurance – This requires your subcontractor to name you as an additional insured on their policy and provide you proof that this has been done.  This gives you direct rights against your subcontractor’s insurance policy in the event of a lawsuit.

Since the ability to enforce any contract clause depends on the precise wording used, it is imperative that your subcontract forms be reviewed by an attorney experienced in construction agreements.