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November 12, 2012
I am often asked, “Who is contractually responsible for placing Builder’s Risk Coverage on a construction project?”
In the construction world, contractual obligations are established on paper and the trust is established with a handshake. Far too often that trusting handshake disguises an insurance coverage gap, which can lead to a major dispute. What most contractors don’t know is that:
You CAN Avoid the Liability Gap
I recently worked on a project where my contractor was covered by an owner purchased Builder’s Risk Insurance Policy. Luckily my client was smart about how he approached it. You see, midway through the project there was a fire that destroyed a large portion of the work in progress. While the owner’s policy covered that event, it was determined that one of the contractor’s workers caused the fire, so the owners tried to stick the contractor with the liability. However, the contractor had the foresight to add verbiage in the contract that specified owner coverage. When the owners tried to shirk liability, my client simply pulled out the contract and clarified the owner’s responsibility.
Recommendations: In order to save yourself an expensive liability nightmare
Part of the Construction Practice Group’s service is protecting your interests by helping you cover all of your bases. By bringing us in at your contract phase, you can avoid a lot of cost and headaches down the road.