Arkansas HVACR NewsMagazine November 2019

S tate, National, Chapter News State national Chapter News

Repose Requirement . The Statute of Repose is the period of time that a party can bring legal action against you due to defect in construction after a project has been completed. The period of time varies in each State. I urge you to consult with a licensed insurance agent to learn the statute length in the States where you perform work. This clause requires your sub to maintain general liability insurance coverage for the period of time outlined in State in which the work is performed. This means that even after a project is complete, and a sub may retire or go out of business, they must maintain general liability coverage until the statute is no longer in effect. Another important part of the agreement is the Hold Harmless Clause . This is often referred to as the indemnity agreement. In this section, a sub-contractor agrees to hold the other party harmless for specified actions, injuries or damages. It is recommended that this paragraph be bolded and all capital letters so it will be more visible than other sections. The next ingredient is the Waiver of Subrogation . During an insurance claim, the insurance company’s subrogation rights are retained from the party who was harmed, and can seek reimbursement from the responsible party. With a waiver of subrogation clause, the sub-contractor’s insurance

company will waive their right to seek reimbursement from you or your carrier. Another requirement should be Additional Insured Status – Ongoing and Completed Operations . Your agreement should include the sub to name you as an additional insured for Ongoing and Completed operations. This will provide you a level of coverage and defense for any claim caused “in whole or in part” by the named insured. As an additional insured, the sub- contractor’s insurance carrier cannot seek recovery from you. The final clause we will discuss is the Thirty (30) Day Notice of Cancellation provision. This status will name you as a party that will be given thirty days notice in the event your sub-contractor’s insurance policy is being cancelled for non-payment of premium or otherwise. This is key because you are requiring your sub to maintain their insurance and you want to be notified if they are not doing so. If your sub’s insurance lapses, you may become exposed to claims of which they should be responsible. All effective contracts should contain the elements discussed here. However, all contracts should be written and reviewed by a licensed attorney before implementing into your operation to ensure that all language is legally binding. There are many other aspects of risk management not covered in this