Property & Casualty

Analysis
The Ward Insurance Construction Team received a contract document from a client who is a Sub-Contractor. The task was to review the insurance and indemnity clauses. Upon close examination, the team quickly discovered that the contract required $5 million in Pollution & General Liability coverage for the Sub-Contractor. In addition to the increased limits, the contract also required a Builders Risk policy and an Owners & Contractors Protective on the owners behalf against public policy.

However, upon complete review of the indemnity provisions, Construction Team members determined that the contract requirements could be illegal because the contract transferred the sole negligence of the Owner to the Sub-Contractor. The Construction Team advised the client of the potential problems and significant loss associated with complying to the contract terms. Quotes were obtained for increased limits for pollution Liability and Builders Risk coverage. In addition, a quote for the Owners & Contractors Protective policy in the name of the owner was prepared. Finally, a conferece call with the owner was made to discuss the indemnity clause and to negotiate acceptable insured wording.

Conclusion
The Ward Construction Team was successful in providing the Sub-Contractor additional insurance coverage at a reasonable cost. The Team was also able to reduce the warranty period of the contract from five years to a one year period. The knowledge and experience of the Construction Team was an important factor in helping both parties reach their objective.