presents presents Construction Contracts: Crafting Insurance and Indemnification Clauses and Indemnification Clauses Negotiating Provisions to Allocate Risk and Minimize Liability A Live 90-Minute Teleconference/Webinar with Interactive Q&A Today's panel features: James P. Bobotek, Senior Associate, Pillsbury Winthrop Shaw Pittman , Washington, D.C. Tamara L. Boeck, Of Counsel, Stoel Rives , Boise, Idaho Scott D. Cahalan, Partner, Smith Gambrell & Russell , Atlanta Scott D Cahalan Partner Smith Gambrell & Russell Atlanta Wednesday, August 25, 2010 The conference begins at: The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 am Pacific 10 am Pacific You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrants.
Construction Contracts: Construction Contracts: Construction Contracts: Construction Contracts: Crafting Insurance and Crafting Insurance and Indemnification Clauses Indemnification Clauses Indemnification Clauses Indemnification Clauses James P. Bobotek Pillsbury Winthrop Shaw Pittman LLP
Tips for drafting insurance provisions Tips for drafting insurance provisions Tips for drafting insurance provisions Tips for drafting insurance provisions Carefully consider the type of project and all potential risks so that they may be properly allocated and/or transferred; Clearly identify each type of coverage required, necessary Cl l id tif h t f i d endorsements, limits and sublimits (ask the client’s risk manager or insurance broker to weigh in on this); Identify the duration of each type of coverage, taking into consideration applicable statutes of limitations and statutes of repose; Require that certificates of insurance and copies of policies with all required endorsements be provided before any work commences and also as a condition precedent to payment; commences and also as a condition precedent to payment; 3 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Tips for drafting insurance provisions Tips for drafting insurance provisions Tips for drafting insurance provisions Tips for drafting insurance provisions Require that certificates of insurance and policies be provided upon each policy renewal or inception of new coverage; Identify the specific forms and/or coverages under which your client is to be made an additional insured; Ensure that deductibles and/or self-insured retentions may be satisfied by payment by anyone. 4 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Coverages Under a Typical CGL Policy Coverages Under a Typical CGL Policy g g yp yp y y Coverage A – Bodily Injury and Property Damage Coverage B Coverage B – Personal and Advertising Injury Personal and Advertising Injury Supplementary Payments 5 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Coverage A – Bodily Injury and Property Damage Property Damage I Insuring Agreement i A t What the insurer giveth Exclusions Exclusions What the insurer taketh away 6 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Coverage A - Insuring Agreement C A I i A t We will pay those sums that the insured becomes legally obligated to pay as becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. pp ISO Form CG 00 01 12 07 7 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Coverage A Coverage A - Insuring Agreement Insuring Agreement We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. Who is “the insured”? Named Insured – important to ensure dec page is correct Insured (Who Is An Insured section) employees, officers, directors (acting in scope of employment) real estate managers newly formed/acquired organizations (grace period) Additional insureds 8 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Coverage A - Insuring Agreement C A I i A t We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily to pay as damages because of bodily injury" or "property damage" to which thi this insurance applies. i li ISO F ISO Form CG 00 01 12 07 CG 00 01 12 07 9 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
"Bodily injury" means bodily injury, sickness or disease sustained by a person sustained by a person, including death resulting from any of these at any y y time. ISO Form CG 00 01 12 07 10 10 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
"Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it the time of the occurrence that caused it. ISO Form CG 00 01 12 07 11 11 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Coverage A - Insuring Agreement g g g This insurance applies to "bodily injury" and "property damage" only if: property damage only if: (1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; (2) The "bodily injury" or "property damage" occurs during the policy period during the policy period . . . 12 12 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
"O "Occurrence" means an accident, " id t including continuous or repeated g p exposure to substantially the same general harmful conditions. l h f l diti Seems straightforward – but not Major issue in construction defect cases – is faulty workmanship an occurrence? ? 13 13 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Products Products- -Completed Operations Completed Operations Separate sub-limits in a CGL policy Failure to obtain and procure leads to many breach of contract claims. Three-part test for coverage. 14 14 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
Products-Completed Operations Products Completed Operations Must Occur Away from Your Premises. To be included within the products completed operations hazard To be included within the products-completed operations hazard, the bodily injury or property damage must occur away from premises owned or rented by the named insured. Bodily injury or property damage that takes place on the named Bodily injury or property damage that takes place on the named insured premises is not within the products-completed operations hazard (this can be amended by endorsement, however). 15 15 Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek Construction Contracts: Crafting Insurance and Indemnity Clauses James P. Bobotek
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