To explain those risks--and to give contractors sample language to help them avoid common pitfalls--Schinnerer recently published the Contractors Design Liability Contract Guide. The booklet covers the two types of contractual agreements that contractors run into: agreements with clients and agreements with design professionals. Topics include indemnity provisions, design delegation, existing hazardous conditions and material price escalations.
The booklet also offers a brief discussion of vicarious liability, explaining how the negligence of a subcontracted design firm can come back to haunt a contractor.
"The contractor is liable for the performance of the design professionals who work for them," says Jones. "Unfortunately, they cannot contractually shift all the risks to those design firms. They can, however, address them through some of the sample provisions in this booklet."
The guide was published as a service to policyholders in CNA/Schinnerer's Contractor's program, which provides professional and pollution liability insurance on a non-admitted basis in all states. Policyholders also receive a quarterly risk management newsletter, Constructive Comments.
Source: Schinnerer, Nov. 17, 2004