Eight Key Points For Contractors To Know About Safety Obligations In Construction Contracts

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April 25, 2006

By: Chester Bukowski

There is a growing trend for owners to include in construction contracts specific obligations and duties regarding jobsite safety in addition to, or in place of, the routine language requiring the contractor to comply with "all applicable federal state or local laws or regulations". Being aware of and complying with those obligations is not only legally necessary; it's just plain good business!

1. Your contract may subject you to obligations and liabilities different from and greater than those created by OSHA, state safety regulations, or common law negligence and premises liability concepts. Therefore, it is important for you to carefully review any contractual provisions regarding safety to ensure that you understand them, and that your estimate or contract price includes sufficient money to enable you to comply with them. Failing to follow contractual safety requirements may make you liable for breach of contract, as well as for OSHA violations or for negligence;

2. Review the insurance requirements contained in any new contract with a knowledgeable professional to ensure no gaps in reasonable coverage exist, especially if the requirements are unfamiliar to you. A failure to comply with some contractual safety obligations may not be fully covered by your "standard" liability policy;

3. Your failure (or claimed failure) to comply with safety provisions required by your contract could result in progress payments being withheld or cut by the owner and/or architect. Maintaining cash flow on a project is a big enough problem without additional headaches caused by safety non-compliance issues;

4. Always check to be sure subcontractors and suppliers, where applicable, have submitted valid, properly filled-out, certificates of insurance prior to their beginning work on the project. Discovering that a subcontractor does not have valid insurance after an accident has occurred is an extremely unpleasant experience that can subject you to unnecessary liability;

5. Don't assume every jobsite accident is simply an "insurance matter" that will be paid for by somebody else, or your or some other insurer;

6. Review any "safety programs" required by the owner or its insurer that are incorporated into your contract to be sure that you can, and are willing to, comply with them. These requirements can be very onerous, and far exceed OSHA or other governmental requirements;

7. Similarly, check any references to laws, regulations, or codes that are incorporated by reference into your contract to be sure that you understand them and can comply with them. Ignorance will not be a defense!

8. Be sure that your field supervisory staff is aware of, understands, and enforces compliance with any of these safety rules and procedures;

In conclusion, being aware of your obligations, and maintaining an updated, insurance portfolio that adequately covers them, is essential to minimize liability for the accidents that inevitably occur on the jobsite.