Insurance and Indemnity Issues

A project developer should obtain appropriate indemnities against and insurance coverage from the various parties with whom it contracts and should require those parties to obtain similar protections from their subcontractors and material suppliers for the benefit of the project developer.  Relevant indemnities include indemnities against personal injury, death, and property damage claims; contractor and subcontractor lien indemnities; an indemnity for taxes (other than those attributable to the developer); an indemnity for violation of applicable laws; and an indemnity for intellectual property infringement claims.  Appropriate insurance policies include commercial general liability, workers’ compensation and employer’s liability, automobile, errors and omissions (for design and engineering services), and builder’s all-risk (for the project).  Policies should name the developer and its financing party (if any) as additional insureds and contain appropriate waivers of subrogation.  Appropriate policy limits will vary with respect to the nature of the work being performed by the insured and the scope of the project.  It is advisable for project developers to consult with an insurance or a risk management specialist to ensure that appropriate types and levels of coverage are obtained.

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