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Being naïve does not mean you’re not at risk

Legal liability group developing tools to help ATSSA members

Pam 0 7870 Article rating: 3.0

The overreaching contractual obligation to assume responsibility for another party beyond the extent of your own negligence or willful misconduct is unreasonable and a clear and present danger to the industry.  

I recently listened while an ATSSA member shared an experience, recounting the unsettling details of a lawsuit that altogether changed his approach to every project. For this member, had it not been for a negotiated settlement in exchange for a full release, a jury award would have easily exceeded the available limits of liability insurance and forced a sell-off of corporate assets. The hard-to-swallow reality of the matter was his involvement was simply a consequence of a far-reaching contractual obligation. 

The business survived with memory of the experience serving as an endless reminder to never again roll over for blanket contractual risk-shifting.

Become familiar with ‘scope of work’ and indemnity in contract agreements

Understanding those terms can limit liability

Pam 0 16703 Article rating: 5.0

Subcontractors may be unaware they can review and negotiate subcontracts before signing them.

Negotiating can be as simple as "red lining" words to delete from the document or adding words or sentences.

Two important items that should be thoroughly reviewed before signing any subcontract agreement are the “scope of work” and “indemnification” clauses. The scope of work should be clearly defined and is usually one of the first paragraphs of the subcontract. 

Indemnity is a contractual obligation of one party to compensate for the loss incurred by another party due to the acts of a third party or one's own actions.