Part 2 of 2 – Facility Maintenance Contracts – Contractor’s Special Insurance Considerations
By AIA Contract Documents
April 28, 2023
Part 1 of this insurance article provided a summary review of the standard insurance policies found in a facilities maintenance contract. Part 2 of this insurance article covers special insurances a contractor may want to procure based on the scope and location of the maintenance work.
- Pollution Liability. If a contractor’s scope of work includes the handling or abatement of asbestos material, a pollution policy should be considered. This type of policy will generally provide coverage for asbestos-related claims for bodily injury, property damage and cleanup costs. The pollution liability policy may also provide coverage for claims related to the transportation and disposal of the materials used during abatement and the asbestos waste.
- Equipment Floater and Inland Marine. If a contractor performs work on multiple sites that require a considerable amount of equipment transport, both an equipment floater and inland marine insurance policy may be appropriate for a contractor to procure. Equipment floater policies typically provide coverage for the contractor’s owned or leased equipment in the event of theft, vandalism, or collision. If a contractor wants coverage for a broader range of property (e.g., materials, supplies or other goods in transport), an inland marine policy may be the right choice. An inland marine policy will generally provide coverage for a broader range of property and damage types (e.g., fire, flood, earthquake, etc.).
- Riggers Liability Insurance. If a contractor will lift any property or equipment owned by the client (e.g., a roof top unit), a contractor may want to consider riggers liability insurance. A contractor’s commercial general liability policy often excludes coverage for property owned by others while it is under the care, custody, and control of the contractor. So, adding riggers insurance may properly account for a risk associated with the damage to the client’s property while it is lifted into place.
- Railroad Protective Liability. If a contractor performs work on or near a railroad, a contractor may need to enter into an access agreement with the railroad before the work begins. This agreement typically requires the contractor to hold the railroad harmless for any liability arising out of the contractor’s work on or near the railroad. If this applies to the contractor’s work, a contractor may want to consider railroad protective liability insurance, because this type of coverage may be excluded from a contactor’s commercial general liability policy.
Each special insurance policy may have different limits. Limits can be per accident, per occurrence, or in the aggregate, and each limit may need to be reviewed and adjusted based on the project’s scope of work. Additionally, the specific terms and conditions of each insurance policy will determine the parties and the types of claims covered. Consulting with an insurance adviser is recommended.
AIA Contract Documents new facilities maintenance documents are designed to address the business conditions and legal environment of facilities maintenance. The documents are intended to be used when a client hires a contractor to perform any building repair, maintenance, or improvement, and are further described below. Learn more here: AIA Contract Documents New Facility Maintenance Agreements
AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.