Contractors Review Your Contracts
Listen to the Podcast for Contractors Review Your Contracts Here
One of the biggest things we recommend to our contractor customers is to review your contracts before accepting a new job. Contractors, GC’s and subcontractors can save themselves a lot of headache and money in the long run by making sure they have the correct coverage for a new job before they start. Don’t assume that your general contractor insurance policy will cover all jobs!
It’s a far to common occurrence for a contractor to accept a new contract without reviewing the entire thing. But, with the increase in projects and fluctuating costs, it’s becoming a bit of a problem. Most of you have all been there, you get a contract handed to you and it’s more like a small book. 12 pages thick, so you review what you are going to get paid, double check supplies and staffing and think the rest will be alright. This has worked just fine for people for decades, but with the influx of contractors working for with bigger companies on bigger projects, the requirements for insurance coverage are becoming stricter.
Learn more about what is in a contractor’s contract, here.
What Happens to Contractors who Don’t Review Your Contracts?
Here is a common scenario. The contractor calls up their Bancorp agent and asks them to send over the certificate. The agent does so promptly, and the contractor begins work. But it takes the main company three to four weeks to process the certificate of insurance they received. In the meantime, the contractor has done a lot of work and racked up many man hours for an agreed upon price. Then, all of a sudden, the insurance department says that the certificate provide isn’t going to work, not only do you need to make us an additional insured. But they also need a phrase, that you’re likely going to hear in cases like this, that they need to be made primary. And non-contributory meaning that if anything happens, your insurance agrees to be the primary insurer. And they’re not going to ask the contractor, the, the GC to contribute to any claim at all. This ultimately means they are putting all the liability on the contractor.
While this is becoming more common, and something that can be done. There is typically a charge for it. Because the original bid was just accepted without being fully reviewed, you likely didn’t include this additional charge in your bid. So your margin has now decreased.
The moral of the story is to review your contracts in detail, whether you get a multipage or even a two page agreement. Read it! Read the insurance part of it. Keep in mind the contract is written by lawyers so it’s understandable if you don’t understand the verbiage. If this is the case, contact your agent to assist you in reviewing the insurance section, or a laywer for the rest.
This simple review can save you weeks off the job and being stuck with a couple thousand dollars in bills that you could have included in your contract.
Bancorp’s insurance experts are available to provide you with a free review and consultation. Contact Us – Bancorp Insurance Call 800-452-6826
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our agents.
