{"id":281780,"date":"2014-12-25T06:34:47","date_gmt":"2014-12-25T13:34:47","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=281780"},"modified":"2014-12-17T14:35:21","modified_gmt":"2014-12-17T21:35:21","slug":"5-contract-phrases-that-could-cost-construction-clients","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/5-contract-phrases-that-could-cost-construction-clients\/","title":{"rendered":"5 Contract Phrases that Could Cost Construction Clients"},"content":{"rendered":"

Insurance Business | December 15, 2014<\/p>\n

The intricacies of insurance requirements in construction contracts seem like they\u2019ve never been denser.<\/p>\n

According to a new white paper from Lockton Companies, insurance carriers are increasingly implementing restrictive additional insured endorsements, making full transfer of contributory negligence difficult.<\/p>\n

\u201cThere is a wide array of words and phrases that trip people up when looking at the insurance requirements in construction contracts,\u201d said Diane Bureman, Senior Vice President and Senior Account Executive with Lockton. \u201cIt is important that the insurance terms addressed in the construction contract are completely clear and ones with which you can comply.<\/p>\n

\u201cEvery word and punctuation mark in a contract counts, so read everything literally.\u201d<\/p>\n

Misunderstanding such language can lead to rejected insurance claims for policyholders, and potential E&O claims for involved agents.<\/p>\n

Bureman identifies specific examples of these terms in \u20185 Maddening Phrases That Can Cost You in Construction Contracts,\u201d including:<\/p>\n

1. Additional Insured vs. Additional named Insured<\/p>\n

There\u2019s just one word of difference between these two phrases, but that one word changes the meaning significantly. Bureman advises that most times, an insured would not want to add an \u201cadditional named insured\u201d as they have the same rights as the primary insurance policyholder.<\/p>\n

Additional insureds, on the other hand, are not covered for any claims not caused by the primary holder.<\/p>\n

As such, additional named insureds receive the same coverage as the policyholder without having to pay a premium. You could be left with liabilities and exposures beyond your control by additing additional named insureds.<\/p>\n

2. Maintain vs. Provide<\/p>\n

When it comes to CGL policies, many contracts state CGLs must \u201cprovide\u201d completed operations coverage for a certain number of years. This may force a contractor to implement a controlled insurance program, Bureman says, while \u201cmaintain\u201d actually provides insurance covering the agreed up time frame.<\/p>\n

3. Notice Requirements<\/p>\n

Because insurers rarely provide notice of cancellation, expiration or a notice of material change, contractors may agree to provide notice of change, modification or nonrenewal if they want to assume this responsibility.<\/p>\n

\u201cThere are times when exceptions may be made, for example, with governmental bodies like the Corps of Engineers,\u201d Bureman says. \u201cBut these are rare and only available when there is a regulation, statute or covenant in place requiring this notice.\u201d<\/p>\n

4. Subject to Policy Terms, Conditions and Exclusions<\/p>\n

A common contract phrase to limit liability, \u201csubject to policy terms, conditions and exclusions\u201d appears in many contracts to remind insureds that contractual liability coverage is just that: subject to policy terms, conditions or exclusions\u2014things that aren\u2019t always easily defined.<\/p>\n

5. Aggregate Limits<\/p>\n

A standard CGL policy contains a general aggregate and products\/completed operations aggregate. The general aggregate refers to premises and ongoing operations occurrences.<\/p>\n

Bureman says it is common for contracts to require CGL coverage with only a per-occurrence limit shown. That may lead many insureds to believe coverage is unlimited under the policy, though it is actually limited by policy aggregates\u2014both of which must be stated.<\/p>\n

via 5 contract phrases that could cost construction clients<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Insurance Business | December 15, 2014 The intricacies of insurance requirements in construction contracts seem like they\u2019ve never been denser. According to a new white paper from Lockton Companies, insurance carriers are increasingly implementing restrictive additional insured endorsements, making full transfer of contributory negligence difficult. \u201cThere is a wide array of words and phrases that… Continue reading 5 Contract Phrases that Could Cost Construction Clients<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,30,3],"tags":[4739,72,3],"class_list":["post-281780","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-general-liability-policy","category-insurance-claims","tag-commercial-general-liability-policy","tag-construction-contracts-2","tag-insurance-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"\n5 Contract Phrases that Could Cost Construction Clients - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/5-contract-phrases-that-could-cost-construction-clients\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 Contract Phrases that Could Cost Construction Clients - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Insurance Business | December 15, 2014 The intricacies of insurance requirements in construction contracts seem like they\u2019ve never been denser. 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