Protecting A General Contractor From Liability Caused By A Subcontractor

    By Andrew Reidy and Seth Lamden

    Protecting A General Contractor From Liability Caused By A Subcontractor

    Protecting A General Contractor From Liability Caused By A Subcontractor

    By Andrew Reidy and Seth Lamden

    Course / Program Material 2007 TIPS 15th Annual Insurance Coverage Litigation Committee Program - Tucson AZ Andrew's and Seth's paper focuses on how to protect the general contractor from liability caused by the subcontractor. Their paper provides a refreshing angle on an everyday issue. Being both an indemnitee and an additional ...
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    Course / Program Material2007 TIPS 15th Annual Insurance Coverage Litigation Committee Program - Tucson AZAndrew's and Seth's paper focuses on how to protect the general contractor from liability caused by the subcontractor. Their paper provides a refreshing angle on an everyday issue. Being both an indemnitee and an additional insured provides the general contractor with the maximum amount of protection against third party liability claims. The paper examines the important limitation of an "anti-indemnity" statute. Most states have laws that prohibit a party from indemnifying another for its own negligence in certain types of contracts, including construction contracts. Due to the problems that arise in connection with enforcing contractual indemnity provisions, many general contractors require the subcontractor to endorse its CGL policy to include the general contractor as an additional insured. This important provision not only avoids the potential that a general contractor will have to incur significant attorney's fees defending itself and/or pursuing indemnity, but allows the general contractor to obtain a defense and indemnity from an insurer other than its own insurer. Andrew and Seth's paper illustrates how this provision saves the general contractor from paying increased insurance premiums.In conclusion, there are several ways for a general contractor to ensure that it has comprehensive protection from such risk. It is important that a general contractor negotiate (and enforce) insurance specifications by which the subcontractor names the general contractor as an additional insured and procures liability coverage that is broad enough (and has sufficient limits) to cover the indemnity obligations as an "insured contract." The paper offers several options to shield the general contractor from liability caused by the sub-contractor and is a must-read for anyone that handles such issues.

    Product Details

    Product Code

    5190421

    Publication Date

    2/1/2007 12:00:00 AM

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