Managing Risks In Construction Contracts
What insurance is needed on construction projects? What about indemnification?
Every construction project has its risks. From weather delays to problems with materials to permit issues, there is always a possibility that something will go wrong on any construction job.
Protect your business from unnecessary risks by consulting with the experienced construction lawyers at Volpe Law, LLC. Our knowledgeable team of Colorado attorneys can help you manage and allocate the unique risks in every contract.
Construction Attorneys Help You Mitigate Risks
While you can't anticipate every problem that might arise on a construction job, your contract can help you manage risk by specifying who will bear the financial burden when something goes wrong. Some common ways to manage liability include:
- Indemnity Clauses: Indemnification clauses require one person to hold another person harmless, defend them, or reimburse them, under certain circumstances. Indemnity clauses are common in construction contracts but can be complicated under Colorado's Pro Rata Liability Act, which assigns proportional liability to any person or entity who causes damages. There are very crucial nuances to indemnification clauses; therefore, you should have them reviewed and drafted by an attorney.
- Vicarious Liability Clauses: Under this legal theory, a person or entity may be legally responsible for someone else's actions. For example, a subcontractor, outside employer, or insurance company could have legal liability after a workplace accident.
- Construction Insurance Requirements: Insurance policies can protect your construction business in a variety of ways. Some of the most common types of insurance a construction attorney may recommend to manage your risk include:
- Builder's Risk Insurance, which covers damages caused by fire, weather, and vandalism to buildings under construction
- Professional Liability Insurance to protect businesses from claims that errors or mistakes were made in the work
- General Liability Insurance, which protects policyholders from liability in cases of bodily harm or property damage during construction
- Umbrella Insurance, which offers additional coverage in cases of serious accidents or damage that max out your other insurance policies
- Workers' Compensation Insurance, as required by law, to cover the costs when workers are injured on the job
- Inland Marine Insurance, in the event materials for the project are damaged during transport
- Construction Bonds and Contractor License Bonds, required in the cities of Denver and Arvada, protect contractors if they violate laws or regulations during the project
- Owner-Controlled Insurance Programs (OCIP), also known as wrap or wrap-up policies, which are centrally administered for the entire project. You might also see CCIP programs - Contractor-controlled insurance programs.
Owner–Controlled Insurance Programs (OCIPs) were developed to make the insurance programs used primarily for construction projects more equitable, uniform and efficient. OCIPs eliminate the costs of overlapping coverage and delays caused by coverage or other disputes between the parties involved in a project and, at the same time, protect all the contracting parties by bringing the risk of loss from the project within the insurance coverage of the OCIP.
Get Help From Colorado Construction Attorneys Today
Depending on the circumstances of your construction project, the experienced Colorado construction attorneys at Volpe Law, LLC, may recommend some or all of these strategies to help protect your business. For help with your construction contract, call our office or contact us online.