Arkansas HVACR NewsMagazine November 2019

S tate, National, Chapter News State national Chapter News

business. This information applies to a contractor who is hiring a sub- contractor to perform work on their behalf. Some business may only perform work as a sub-contractor to another party. If this describes you, this article may better inform you of the content of contract that you agree to sign. Insurance Provisions are a common clause in any sub-contract agreement. This section outlines the types, and limits of insurance that are required. This portion of any contract should outline the requirement of Workers Compensation including Employers Liability, Commercial General Liability, Automobile Liability, and in some cases Commercial Umbrella Insurance. The limits required may vary by project manager, general contractor, job, or other factors. Best practices suggest you should require your subs to carry limits at least equal to yours, otherwise there may be an impact to your own coverage and premium. Another must for any agreement is the Primary and Non-contributory Provision . There should be a clause that requires your subs to add an endorsement to their policy stating that their insurance policy is primary insurance, and will not seek contribution from other policies including your own. The most commonly missed clause in the industry may be the Statute of

Subcontractor Contract Provisions In the construction industry, most everyone is commonly referred to as a “Contractor”. This term is used to refer to Project Managers, General Contractors, Individual trade subcontractors, as well as clean up crews. The actual “Contract” is sometimes lost in translation when dealing with the day to day operations. The actual contract is a necessary and important part of risk management practice in the construction world. The contract should outline many provisions in the work relationship including but not limited to scope of work, duties, conflict resolution, change order procedures, insurance and/or bond requirements, and various other items. There should almost always be a paper contract in place in order for the work to be ordered, performed and paid. The basic purpose of any sub-contract agreement is to transfer risk to another party. In other words, it can be used to protect yourself in the event of a loss. In this article, we will discuss the key items that your sub-contract agreement should contain to properly protect your