Quick Tip: The Importance of Contractor Insurance

Recently, Mackoul dealt with a Labor Law Claim that proved to be a good example of the importance of contractor insurance- Sarah shares more.

Recently, Mackoul dealt with a Labor Law Claim that proved to be a good example of the importance of contractor insurance.

A cooperative apartment building needed some holes patched in the basement ceiling. They hired someone to fix the problem who had no insurance coverage, and as such, no contract was executed. The super loaned the plaintiff a defective A-frame ladder, which was missing a spreader and rubber footing. Once the plaintiff got to work, he was climbing the ladder when it shifted, causing him to fall. As a result of this incident, the plaintiff sustained a back and spinal injury, resulting in several surgeries.

The reserve was set at $1,500,000, exceeding the General Liability limits and having to go to the buildings Umbrella policy. Since there was no insurance or indemnification in place with the contractor and the building supplied the defective ladder, the liability is on the building and there is no risk transfer. A small contracting job may not seem like a big deal, but it can certainly become one if the right insurance is not in place.

What should the building have done to avoid this situation?

1) Always hire an insured contractor.

2) Have a Hold Harmless/Risk Transfer agreement in place.

3) The contractor must provide Proof of Insurance with Additional Insured status for the building and Managing agent.

4) Never loan any contractors or vendors any tools or equipment. Don’t risk the safety of yourself, others, and your association by cutting corners when it comes to insurance.

For more information, please contact us.

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