Marine Contractors: Liability Protection Begins with the Contract
For longshore and marine contractors who make their living doing dangerous work, handshake deals have been the norm for years. But a handshake just doesn’t cut it when you’re talking about insurance liability and who is responsible if something goes wrong.
A great way for marine contractors to safeguard business before work begins is with a watertight contract to help plug holes that could lead to potential lawsuits or claims. Read on for five good tips to make part of your contract checklist.
5 Good Tips for Marine Construction Contracts:
1. Have a written contract in place, at the very minimum. If you’re contracted for more than one marine construction job with the same client, consider a Master Service Agreement. An MSA will act as a framework for current and future projects in terms of who is responsible for losses to people, property, and pollution that could occur during the course of work.
2. Mind the project details. This may seem straightforward, but it’s surprising how often people don’t read their contracts thoroughly. Before signing, make sure anything you agree to verbally is reflected in the written contract—like start and end dates, project scope, materials, cost, payment schedule, and any other specifics regarding who is responsible for delays or budget overages. If any details change while the project progresses, remember to update the contract with the new information.
3. Know where you fall in the risk hierarchy. Are you acting as the General Contractor on the job, or have you been subcontracted to do one specific portion? Depending on the answer, your ability to tender a claim could change. That’s why GCs should make sure they have the proper Certificates of Insurance (COIs) for all their subs and try to be listed as an additional insured on sub policies. Conversely, if you’re a smaller marine contractor in a sub role, your ability to transfer risk up the chain is limited so it’s important to know what potential insurance liability you could have.
4. Understand the insurance terms in both your contract and policy. Look for things like hold harmless, waivers of subrogation, and knock-for-knock indemnity in your contract, as well as completed operations coverage in the General Liability section of your policy. You should also know which coverages might be excluded in your policy, so look for the EXCLUSIONS heading and thoroughly review what’s listed there. By educating yourself on the clauses and coverages in your marine contractor agreements, you can help to protect your business.
5. Make an advance site visit. Of course, it isn’t feasible to make a quick run to a dredging platform. But if the job is somewhere accessible, do a pre-check to see if there are any potential hazards on site—particularly if you’re doing structural work. Taking “before” photos is also a good idea to prove conditions prior to your start date.
With all the dangers you need to worry about as a marine contractor, you shouldn’t have to worry about the details of your contract, too. By following the guidelines above, you’ll have the tools you need to help ensure your contracts are as strong as possible. When you want comprehensive, all–lines coverage from experts in marine construction, turn to ProSight as the single carrier solution you need.
Value Creation Executive