How Liquidated Damages & Consequential Damages Interact in a Contract

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Construction contracts can be overwhelming when you’re not looking at them every day. That’s why it’s important to understand your contract and the types of classification damages that could be written in it. Even though disputes are inevitable, understanding your contract will ultimately give you a leg up during the claims process. Let’s explore how liquidated damages and consequential damages interact in a contract.

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Topics: Contracts

3 Types of Construction Contract Damages

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In today’s construction climate, building projects and construction contracts can be extremely complex. A Contractor must become thoroughly familiar and fully understand the contract’s terms and conditions.

Any uncertainty with the provisions in a contract may lead to costly disputes whether the resolution is by way of mediation, arbitration, or litigation. All of these dispute resolution forums can be expensive and time-consuming. The ultimate purpose of dispute resolution is to determine the amount of money the party claiming to be damaged by a contract breach can reasonably expect to recover. 

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Topics: Claims, Contracts

What are the 3 Levels of Indemnification?

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If you stop and think about it for a moment, why does anyone refer back to a contract? It’s, unfortunately, when a problem arises. Depending on what the issue is, different contract articles may come into play. So before signing any contract, it’s best to understand what each article is about and how it can affect your ability to do the work. Let’s take a deep dive into one of the articles—Indemnification—as this article appears in almost all contracts in one form or another.

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Topics: Contracts

Defining and Understanding Force Majeure

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Triggering a Force Majeure is about living by the exact words. These clauses are typically interpreted with a very narrow view. The words are generally not given a broad meaning and therefore the exact wording used in these clauses is very important. First, let’s take a step back and define what a Force Majeure actually is. A Force Majeure Clause is a contractual provision that may operate to excuse a party from a contract as a result of an unexpected and disruptive event.

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Topics: Contracts

Why Do Contractors Have to Provide Additional Insured Endorsements?

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A common requirement you’ll find in a construction contract is for any hired contractor to provide additional insured status to parties within the contract. The purpose of this requirement is to protect an Owner, General Contractor and/or another Trade Contractor from potential claims that may arise from work the hired contractor is performing. By having the Owner and General Contractor listed as additional insureds on the hired contractor’s policy, this transfers the potential risk for work done back to the hired contractor.

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Topics: Contracts, Additional Insured

Differences Between Named Insured and Additional Insured: Part 2

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When working on a construction project, the company you are working for may ask to be an Additional Named Insured or an Additional Insured. It’s easy to believe that they are the same thing, but in reality, there are some significant differences between the two.

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Topics: Contracts, Additional Insured

Differences Between Named Insured and Additional Insured: Part 1

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Often, the terms named insured and additional insured get lumped together to be interchangeable. However, that is not the case. Keep reading to learn about each one!

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Topics: Contracts, Additional Insured

Solutions to the Wrap-Up Exclusion Endorsement

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Does the Wrap-Up exclusion found in many Trade Contractors’ General Liability program fill you with dread? This exclusion has historically been a troublesome risk transfer issue.

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Topics: Contracts, Wrap-Up Insurance

Termination for Cause vs. Convenience

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There may come a time during the course of a construction project when a contractor’s relationship is terminated. There are a number reasons this may occur such as:

  • The contractor’s financial trouble
  • Disputes regarding the quality of the work
  • Failing to adhere to the contract documents, or project schedule
  • Failing to pay trade contractors and material suppliers    

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Topics: Contracts

Proportional and Non-Proportional Reinsurance Agreement Differences

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Reinsurance is when an insurance company transfers risk to other parties by a formal agreement—thereby lessening its liability on catastrophic or multiple losses. Essentially, it can be defined as insurance for insurers, and it enables insurance companies to remain solvent after major claim events such as hurricanes.

It's important to know that both Treaty and Facultative reinsurance policies can be proportional or non-proportional in structure. Here are some differences between proportional and non-proportional reinsurance that your insurance company should know. 

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Topics: Contracts, Reinsurance