"Additional Insureds" ..?

[beej67]

So I help out a contractor who needs an as-built certificate done for a water quality facility on a home. He's an ex-collegue of my wife's, a good guy, and someone I generally trust. I had a contract out to him, but he hasn't signed it yet, but I'm sure he will soon, and I've been working basically on a handshake deal so far. We're basically done as of today, and cleaning up the odds and ends so I can get paid. He sends me an email saying to revise my contract (upward to an agreed upon fee, because it took a little more than originally planned) and also says this:

Inform your insurance broker that we'll need an insurance certificate naming (CONTRACTOR) and (HOME OWNER) as additional insureds for the project located at (LOCATION) and naming (CONTRACTOR) as certificate holder.

..and also attaches a "Subcontrator/supplier's waiver and release upon final payment" form to fill out.

This home was previously a foreclosure, don't know if that makes a difference or not.

The "subcontractor/supplier's waiver" is pretty straight forward, says I don't have any lien on the house once they pay me my fee. What exactly is the thing in the quote box going on about? Is that for professional liability or general liability, and what exactly are they asking me or my insurer to assume?

I do have a call in to my insurance broker, but that call might go a lot smoother if I have an idea what they're talking about.

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -

http://www.campbellcivil.com

 

[msquared48]

This change/addition is exactly why I do not proceed with any job without a signed contract.

Friend or not of your wife, there was a reason why this guy did not sign the contract and now, if you want your money, he has leverage. My gut feeling says that he felt that you may not have agreed to the terms if he mentioned them up front. He is practicing back door counteroffers in my opinion and knows more than he is willing to share.

Personally, I would spend an hour and consult with your lawyer after talking to your insurance broker. \

The situation smells regardless of the interpretation of the clause, and it is just bad business.

Mike McCann
MMC Engineering
Motto: KISS
Motivation: Don't ask

 

[DRWeig]

Hi beej67,

Your insurance agent will know, they do it all the time. I assume this is liability and property damage insurance, eh? It's just a declaration that the named parties have an interest in a project you're working on, and that the insurance company is aware of it. But it's full of insurance-company legalese. Has no real effect on your coverage or future coverage, it just makes it easier for the named party to file a claim if needed.

My policy allows me to add "additional insured" entities for no charge, but yours might have a small fee. I think I've probably had to do it a few dozen times over the past 20 years.

Here's a good discussion:

http://www.ehow.com/facts_5906907_additional-insured-certificate-liability-insurance_.html

Good on ya,

Goober Dave

 

[cvg]

you want to be very careful about doing work without a signed contract or at least a signed notice to proceed. most insurance companies frown on that practice and you may not have any coverage for the project because of it...

 

[beej67]

Yes yes, I know, and this is probably only the 2nd time since starting my company that I've done any sort of work on a handshake deal. I did (as always) get notice to proceed via email at each step along the way, regardless.

Talked to my insurance guy and he said this is typically something that goes on general liability to cover the time I'm on their project site. Since I don't carry a general policy, just a professional one, and since I'm already done being on their site, and since it's technically impossible for me to even purchase general liability that goes back in time to cover the time that I was on their site, and since nothing bad happened when I was there, I presume this to just go away once I talk to the head cheese.

They may indeed be in a position to screw me, but the fee is very small, and these are guys that want to maintain a good business relationship in the future, so I'm not worried. My wife even vouched to get the head cheese a job with her firm within the last six months, but the timing wasn't right. She, the PM, and the Cheese all worked together for years at their previous company.

Thanks for the responses.

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -

http://www.campbellcivil.com

 

[Ron]

Beej67...no good deed goes unpunished! Mike is right...but then, you knew that.

File a lien on the project. Tell them you will release the lien upon full payment and acceptance of your terms and conditions. Tell them that negotiating a contract after the fact is unprofessional on their part and that you entered into this in good faith, which they have now compromised.

 

[cvg]

negotiating a contract after the fact is unprofessional on both parts... Get your money, move on and don't do it again.

 

[Ron]

cvg...he's not negotiating...his terms were out there before-the contractor's silence and lack of signed response doesn't negate them, in fact, the contractor allowing beej67 to start his services might be construed as an acceptance of the terms...beej67 just wants them to stick to the terms...they want to change them. Nothing unprofessional about beej67's actions.

 

[beej67]

Followup -

They looked it over and are fine with dropping the insurance requirement, just want me to issue them a revised contract and send them an invoice. The request for an insurance certificate is just boiler plate stuff.

For what it's worth, they also recommended the increase in fee due to scope creep that was outside the (still as yet unsigned) contract anyway, so they've been more than fair. I told you guys I wasn't worried about it.

As always, can't count the checks before they're cashed, etc etc.

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -

http://www.campbellcivil.com