Letting someone work on your worksite?
There is an auto repair garage near me that is going to be remodled into stripmall storefronts. It has those clear glass garage doors that I’ve been looking for – I plan to make temporary walls for my porch with them to block the cold evening winds while still being able to view our garden.
Anyway, the GC stated that those doors would likely be thrown away. I offered to “take care” of that aspect of his job, by removing all the doors myself. He had to check with his boss, and would get back with me.
My question is this: As a GC, what are the issues of having someone not on your crew do work on your site… and how could those issues be resolved?
I’d like to be able to resolve any problems quickly if he has any.
Rebuilding my home in Cypress, CA
Also a CRX fanatic!
Replies
because of liabilty insurance, we are not allowed to have anybody on site, that doesnt belong there.
Brownbagg - I'm curious about that. I know it's customary to recite that "policy" when you don't want people on site, but have you ever seen that in writing from the insurer? If so, in what type of policy - liability or something else? I've seen a lot of insurance policies over the years, and never was there specific language of that type.
Don K.
EJG Homes Renovations - New Construction - Rentals
Don,
Liability is very, very broad. You won't see any policy language to that effect, because they can't possibly come up with all of the permutations of possible events that they could exclude coverage for. Bottom line is that liability coverage will pay anything that you are legally obligated to pay. So there isn't a clear yes or no answer. You can be liable for anything that a jury says you're liable for. When the judges gavel falls, that's when the insurance company steps in and pays whatever amount they hold you responsible for, if it's within your policy limits. Often the insurance company will provide legal defence to try to keep from paying at all.
Most carriers have Risk Managament people that will go by and inspect a business or a job site and make recommendations on safety issues. The risk management people are the ones that suggest the "Employees Only Beyond This Point" signs, etc. That's not to say that they aren't liable if a customer steps into the forbidden area and gets hurt.
It's pretty clear that it's not clear at all. If you can get the G.C. on site to allow you to remove the doors at your own risk, go for it. If you get hurt, you could certainly sue. But whether you could collect or not is any one's guess.
You might work it out with him to just "steal" them on a Saturday.
Greg
Greg, You sound like a lawyer and/or an insurance co. employee. I know liability is very broad. I also know that exclusions are read in a very restrictive manner. I know the Risk Management folks do whatever they can to protect their ####...ureds. I also know that there are lots of people out there that just don't want the customers nearby so they can't see what's going on. BTW, I'm not personally involved in this and was just curious about whether the man had ever seen the language he was talking about in his policy.
Your idea of just "stealing" them isn't good. That's kind of a back door way to avoid dealing with the problem. It subjects the man taking the doors to potential criminal liability from the owner since he has no proof that he's allowed to "steal" them. it also doesn't change the potential liability much for the owner. In NY, even a thief is entitled to reasonable protection and can sue. I suspect it's the same in many other states.
I think Blue's anticipation of the indemnification is probably the most likely way to handle it, possibly with the contractor looking at an insurance policy to make sure the indemnification is meaningful.
Don K.
OK, then how does someone "belong there" - that's what I'm interested in?
Rebuilding my home in Cypress, CA
Also a CRX fanatic!
Edited 11/11/2005 6:01 pm ET by xxPaulCPxx
Perhaps you could draw up a small contract for the removal of the doors, have him sign the contract. If you have blanket GL similar to ours policy, your GL covers the work you do.
If you do not have GL, and he has a problem, he can cover you under his GL and deduct the cost from your services. Your propsed cost could be stated. Make a secondary and unofficial agreement that you will receive the doors as payment.
Otherwise, if he is not worried, just go get the doors.
What is this world coming to? What happened to ole hand shake and a smile, with your money waiting for you when you finished?
This was something along the lines of what I was thinking of: Exchanging my "Demolition and Disposal" service in exchange for the doors that I demolish.Rebuilding my home in Cypress, CA
Also a CRX fanatic!
what percent of your yellow pages to attorney listings occupy?
Right.
You might have to indemnify him.
blue
By indemnify, you mean create a contract that says any injuries to me that occure at this site on these set days are to be covered by myself or my own insurance?Rebuilding my home in Cypress, CA
Also a CRX fanatic!
Paul, I won't begin to explain indemnify. I'm a carpenter, not a lawyer. All I know is that I'm always indemnifying everyone.
blue
Indemnify... hold harmless... means that you will defend the party in question if they are the subject of a claim as a result of something you did.
Example: a GC has a plumber on the job, and the plumber handles a test plug carelessly and drains the entire stack on an antique parquet floor. The HO sues the GC for the damage, and since the plumber caused it the plumber's insurer has to defend the GC as though the GC were a policyholder.
Another example: a framer's fork boom is driven over soft ground with a unit of plywood extended 40 feet in the air, and collapses on the neighbor's house, crushing their Steinway piano. The HO sues the builder for the damage, and the framer's insurer has to defend the builder because the framer has indemnified the builder.
I'm just a carpenter too, but that's what I understand about it. It's a way of keeping one insurance company off the hook and hanging another one.
David - Your understanding of indemnify is essentially accurate, maybe expressed a little more narrowly than the books. You refer to it in terms of defending the other party. Actually, that's making them an additional insured most times.
To indemnify them means to make them whole after the fact for any damages they suffer because of your conduct. So, if they are forced to pay a judgment, you have to repay them for that judgment. Theoretically, if they are forced by the lawsuit to pay for a lawyer, you would have to repay them for that expense too. As a practical matter, most often their representation would be handled by their own insurer, so they would not be out of pocket for that expense. A court would probably say that their insurer is not entitled to be paid the legal fee, but if they used their own lawyer, they could collect. A hold harmless clause is very similar. For these purposes, it's the same thing.
You phrased it in terms of insurers getting off the hook. It's not the insurance companies. The companies themselves are usually not parties to the contracts, so the liability at first runs between the parties themselves except in California where the rules are a little different. (Here the parties to the case would be Paul and the GC.) It actually involves special insurance - contractual coverage rather than liability coverage. The insurance companies rights stem from the rights of their insureds.
Don K.
Good explanation, Don, better than mine. My broker told me that when I am an additional insured and have an indemnification clause in place with my sub, my insurance company will not have to be part of a claim stemming from my sub's conduct. He may have dumbed it down for me, but it sounded like my insurer getting off the hook.
Like Blue says, all I really know is that I am always getting indemnified by everybody.
You're doing good if you are being indemnified. That means the other guy (or his carrier) is picking up the ball.
If you are indemnifying him (like maybe you would with an owner) then you have to pay the money for a foul up.
It can get a little funky sometimes. Insurers can go out of business before a suit and the state may have to step in, or a contractor can go under and the carrier's role gets confused, or whatever. That's the benefit to being an additional insured. You don't have to go through a trial to see if you are legally entitled to indemnification - you just hand the papers to the other guy's insurance company when the fit hits the shan and they take care of it.
The way many/most insurers save themselves money is that they deny you are entitled to true indemnification (payment of 100% of the loss), they say you were partly responsible, so they don't have to pay the legal bill. This makes it a question of fact usually and forces the case to go forward, maybe to trial or settlement. Example: Forklift with plywood tips and hits the neighbors' house. You, as GC, say to the sheather (sub), "We have an indemnification agreement. Call your carrier and take care of this." The claims guy from Screwem Insurance company comes out, does his "investigation" and says "Our client shouldn't indemnify you David because you as GC were responsible for general conditions and should have had the ground leveled so the forklift didn't hit that rut. Sure we owe something, but our client's not responsible for it all. You owe half."
You go back to your insurer, who has to hire a lawyer for you under your policy, and you have to go through the litigation to decide if the sub really owes you 100%, or 90% or 50% or whatever. (Less than 100% is called partial indemnification or contribution.) Chances are the case will settle before it goes to trial, with your carrier paying something to get out of the case. So, Screwem Insurance comes out ahead. They didn't have to pay for a second lawyer for you, and in the end, maybe they saved 10 or 20% of the money from the settlement. You, meanwhile, get frustrated having to deal with this chit for three years while the case is ongoing.
Change the scenario slightly. When the sub comes to you looking for the job, you a.) include a provision making your company an additional insured on his policy, and b.)you make sure that his indemnification is covered by his policy. When the lift goes over, you go to him AND you go directly to SCREWEM Insurance for representation. They have a legal obligation to you since you are an insured of theirs. They are stuck, on the hook both ways. It's much harder (though not impossible) for them to try to deny liability.
Moral of the story (for the party with the best negotiating position) is to get the indemnification provision and get named as an additional insured. Don't forget to actually follow up for the certificate naming you as insured. I can't tell you how many times everybody says yeah, next week -- until it gets forgotten about. The better rule is that the work don't start until the certificate is in the file. And don't forget to actually check with the carrier to make sure it's a legit certificate. It's amazing what can be done with white out and a copy machine or a scanner.
Lesson over for now. Wait 'til you get the bill <g>.
Don K.
[By the way, the rules can change somewhat from state to state.]
Thanks Don and David, your explinations give me something to work with here.
As these doors would cost me thousands of dollars if I tried to buy them new (mabey $15,000?), I could justify spending a little money on insurance to aquire them... if it's even neccisary.Rebuilding my home in Cypress, CA
Also a CRX fanatic!
Paul,Do an end run around."Buy" the doors from the GC for a dollar. Sign a bill of sale that says you buy them for a dollar, and you are responsible for removal of the doors, from the building/site.
"And, in my humble view, neither Democratic nor Republican party politics has anything to do with lib or con anymore. It's now just pandering to the visceral hatred that's been bred amongst those who refuse to waste their time and energy performing one of the singular most difficult tasks known to man: thinking." -SHG
Good luck with the recycle project. I don't know if you will take them down your self, or have a garage door co do it, but watch out for those springs!
Don K.
Again, great info.
My subcontract was written by my insurer, and I ask for certificates mailed by the sub's broker. Their coverage is verifiable online.
It's usually no big deal, except for the fact that the additional insured status sometimes costs up to $250 and only lasts the length of the policy.
I knew it!Yer just a big ole indemnificator
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If it were me, I sure wouldn't let anyone do that.
What would the GC save, something like $100?
But by having you take the doors, it would open the GC up to all kinds of liability. Even if you had a written agreement, you could still sue him if you got hurt.
The GC's insurance carrier would pay you off with a few thousand bucks rather than going to court. Then they'd raise the GC's insurance rates because he'd had a loss.
Why risk that to possibly save $100?
OK, so how do you handle the risk of subcontractors on your job site? Are they under your insurance, or are they covered by their own?Rebuilding my home in Cypress, CA
Also a CRX fanatic!
There's no way to eliminate the risk that a sub will sue you for something that happens to him or her on your site. Let's say you are negligent, and leave an excavation open or a high deck without railings, and a sub (or someone else) falls and is injured, they can sue you. Your negligence caused them harm. In the case of a sub, it would probably be the individual that sues you, not the company itself (i.e. if the sub is a corporation). I know of a recent case where a painter fell in an open stairwell and went after the GC.
A sub's insurance covers property damage or personal injury caused by their operations. It can have the effect of protecting the GC too, especially if the GC is an additional insured.
In the case of the doors, I could easily have someone come on my site to remove them if they were insured properly, named me as additional insured, and indemnified me against claims caused by their operation. Same as any sub. Doesn't matter if I pay them money or they just take the doors.
Paul, if your plan doesn't work out, why not offer a couple of hundred bucks to have them set aside for you to take. Most guys would jump on the cash.
Only problem, you might not get all hardware, or the understanding of how it was assembled. Good luck.
Mike
Trust in God, but row away from the rocks.
Only besides those problems you mentioned, I'm also worried they will remove the doors by backing a dumptruck through them!Rebuilding my home in Cypress, CA
Also a CRX fanatic!
Most people would rather see something saved than thrown in a dumpster.
The old saying "Cash talks......"
Salvage is a big bussiness now, don't be surprised if the contractor works something out. Mike
Trust in God, but row away from the rocks.