Building Design and Construction Handbook - Merritt - Ventech!

17.50 SECTION SEVENTEEN
independent contractors or to liability assumed by any contract covered by the
policy.
2. Bodily injury sustained by employees while engaged in the employment of
the insured.
3. Liability for damage to property occupied, owned, or rented to the insured
or in the insured’s care, custody, or control.
Contractors should be familiar with the provision of the commercial generalliability
policy pertaining to contractual liability. The policy automatically provides
coverage for the following written contracts: lease of premises; easement agreement,
except in connection with construction or demolition operations on or adjacent to
a railroad; undertaking to indemnify a municipality; side-track agreement; or elevator
maintenance agreement. A premium is charged for such agreements as may
be disclosed by audit.
There is no protection for the liability assumed in some very common types of
agreements that include service, delivery, and work contracts. Many of these contracts
are signed without full realization of the liability assumed. Each such agreement
should be submitted to the insurance company at the time the policy is written
in order that a premium charge may be computed and the agreement covered under
the policy.
The most important contractual liability that may be assumed by the contractor
is the so-called hold-harmless clause. A common type of hold-harmless clause as
written by a general contractor to a subcontractor is illustrated in the subcontract
rider in Fig. 17.7, Paragraph 32a. A similar clause written by the owner for inclusion
in the general contract would be slightly modified and would substitute in
appropriate places the word ‘‘Contractor’’ for ‘‘subcontractor’’ and the word
‘‘Owner’’ for ‘‘Contractor.’’
Hold-harmless clauses can be automatically included in a general contractor’s
commercial general-liability policy. However, the general contractor should include
the previously mentioned subcontractor hold-harmless clause in each subcontract.
Subcontractors will probably be required by their insurance companies to pay an
additional premium for this coverage.
The commercial general-liability policy includes complete and automatic products-liability
insurance, including completed-operations protection. The one exception
to this complete coverage is that the policy does not include liability for damage
to the work or to the goods themselves, such as the obligation of the contractor
to repair or replace if there are defects. While the policy provides coverage, it is
in fact an optional protection, which may be deleted. However, every contractor
should take advantage of this coverage.
Most building contractors use elevators or hoists during construction. The policy
automatically covers elevators, hoists, and other such hazards. Escalators may be
covered for an additional premium.
The breadth of public-liability protection available, the numerous hazards to
which a contractor may be exposed, both known and unknown, and the necessity
for having complete coverage at all times indicate the need for the advice of trained
insurance representatives.
17.15.7 Workers’ Compensation Insurance
Every state requires an employer to secure a policy of workers’ compensation to
provide for an injured employee the benefits of the workers’ compensation law of