Contract Documents

Signing a Construction Contract in the Middle of the Coronavirus Pandemic . . . Two Contract Clauses to Consider

Practice area:

There is rightfully a lot of buzz in the construction industry about force majeure clauses.  Authors are writing about how far and how much they protect contracting parties from unforeseen and uncontrollable events that cause delay.

While the standard AIA, ConsensusDocs, or other industry form contract time extension and/or force majeure clauses will likely provide some relief as to time extensions in appropriate situations, contracting parties may be best served to acknowledge the uncertainties our industry is confronting by crafting specific language for delays and increased costs resulting from the COVID-19 pandemic.

Sample language for consideration:

Notwithstanding the requirements and obligations set forth in the Contract Documents and this Agreement, Contractor shall be entitled to an extension of the Contract Time and an equitable adjustment of the Contract Price, due to labor shortages, material escalation, or otherwise, for the performance of Subcontractor’s Work due to events and conditions beyond Contractor’s control, including the present

The Intersection of Workers’ Compensation Immunity and Contractual Indemnity

Practice area:

The workers’ compensation statute in many states provides that the workers’ compensation benefits received by an injured employee is the employee’s exclusive remedy.  The benefits are paid based on a no-fault basis and the injured employee is barred from bringing a lawsuit against his or her employer.  The degree in which the exclusive remedy provision applies varies in different jurisdictions.  An ABA 50-State Survey on the exclusive remedy provisions can be found by clicking HERE.

In many construction contracts, a contractor indemnifies an owner for personal injury and property damage caused by the contractor’s negligence.

Here is the fact scenario:  A contractor’s employee gets injured on a jobsite.  The employee receives workers’ compensation benefits but has incurred additional damages beyond those benefits.  The contractor employee cannot bring a lawsuit against the his employer based on the workers’ compensation exclusive remedy provision, but the employee may bring a lawsuit against the owner for the personal injury damages.  Owner

Additional Insurance Coverage: Fundamentals and Misconceptions

Practice area:

Additional insured (“AI”) requirements for commercial general liability (CGL) policies are very common in construction contracts.  An Owner routinely requires its general contractor (“GC”) to provide AI coverage for itself, its affiliates, and sometimes a handful of other entities (lender, architect, etc.).  In turn, the GC mandates its subcontractors to provide AI coverage for the GC, the Owner, and a cast of other characters.  While frequently used, for good reason, this risk transfer tool is often misunderstood.  In this post, I will explain the purpose of AI coverage, identify what it does and does not cover, and provide answers to a few misconceptions about additional insured coverage.

The Purpose of Additional Insured Coverage

The design of AI coverage is to trigger the insurance procured by lower-tier contractors.  The Owner, GC, and subcontractors all have CGL insurance, but the goal of additional insured coverage is to make sure that someone else’s insurer will be on the hook to provide defense and indemnity should

Should You Use Integrated Project Delivery on Your Next Construction Project?

Practice area:

Complex construction projects have many moving parts and numerous stakeholders.  Each project often contains its own unique challenges and obstacles.  Finding the right solution does not often come by trying to utilize a one-size-fits-all approach.  Indeed, complex issues call at times for customized responses.

Discerning the appropriate solution for particular problems involves a variety of decisions.  Chief among many concerns is determining what the priorities are on a given project, and figuring out the best way to achieve those aims for all involved.

A contract solution that seeks to harness the potential of collaboration, and alignment of the priorities of all those involved in complex construction projects, is Integrated Project Delivery (“IPD”).  IPD is a project delivery system that utilizes a team-based approach to construction projects where the risks and rewards of a project are shared by all of the stakeholders and, when done right, maximizes efficiency so projects are completed on time and on budget.

Like other tools, IPD is not