Restoration contractors assume a lot of risks in their contracts and most firms do not know how to manage them. We review hundreds of insurance requests in contracts every year from our restoration contracting clients and from the customers they work for. From that work we know there is a 75% fundamental defect rate on the insurance policies sold to restoration contractors when it comes to insuring risks assumed in contracts. Some insurance coverage defects are a lot more significant than others. The following are some tips that may help you.
Restoration firms have to manage risks in contracts from two perspectives: First, your clients will often expect you to indemnify them (pay them) for damages you may cause on a job and hold them harmless (they are not responsible to help you pay for the damages even if they helped you cause the damages). Second, when you hire subcontractors, you, as the general contractor, should expect your subcontractors to indemnify and hold you harmless for the damages that the subcontractor may cause.
In many ways the indemnity and insurance issues related to these two perspectives mirror each other. Everything your clients want from you is likely something you should be getting from your subcontractors in your contracts with them.