Checklists Help Ensure Risk Transfer Strategies Achieve Intended Goals
According to Frances A. Lettieri, a partner at Fowler Hirtzel McNulty & Spaulding LLP in Philadelphia, contractual risk transfer strategies can help contractors limit their liabilities on construction projects. These strategies often are used to shift liability for property damage and bodily injury incidents from general contractors to subcontractors on a project, either through contractual indemnification provisions or additional insured coverage, where a general contractor is named as an additional insured on subcontractors' insurance coverage. Contractors should use checklists when negotiating such provisions to ensure that the risks are transferred to the extent that they are seeking. "A checklist requires us to pay attention, it gets you thinking not only about what your goals are under a contract but also what you are assuming and how you are exposing yourself and your business," Lettieri said. She added that the checklist should cover indemnity goals, employee injuries and workers' compensation waivers for independent contractors, and the scope of additional insured coverage, among other things.