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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Thursday, June 2, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will address construction counsel's concerns on risk management via the use of waivers of subrogation and builder's risk insurance policies. The panel will discuss revising AIA and other standard forms to equitably distribute liabilities among the contracting parties--general contractor, subcontractors, suppliers, architects, and the owner.

Faculty

James T. Dixon
Miscellaneous

Since 1997, Mr. Dixon has helped members of the construction industry manage risk, avoid loss, and resolve disputes on projects throughout the country. He drafts and negotiates construction contracts, advises clients during the course of construction, and resolves disputes through mediation, arbitration and litigation. He has handled claims relating to defective construction, schedule delay, disruption and acceleration, differing site conditions, unapproved change orders, payment and performance bonds, and mechanic’s liens, among others. Mr. Dixon has unique experience in advancing bid protests on public projects, in resolving disputes on tunneling projects, and in addressing disputes on projects utilizing the integrated project delivery system. He also resolves transactional real estate disputes in residential and commercial contexts. 

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Description

Waiver of subrogation provisions in standard boilerplate language in the AIA Form in their simplest form provide that the parties waive their rights to sue each other for losses covered by their insurance. Although it may seem straightforward, there are several potential pitfalls that counsel and parties should consider when negotiating their contract.

Waiver of subrogation clauses often require that the parties obtain their insurers' consent; a failure to do so can lead to a denial of the claim by the insurance policies themselves. Some boilerplate provisions limit the scope of the waiver and the definition of "work" that can limit the types of losses covered. Where a project involves repair or renovation of an existing structure, a dispute can arise as to whether damage to existing or adjacent property is part of the "work."

The drafting, review, and approval of insurance provisions in construction contracts is either limited to the use of boilerplate language found in AIA Forms, delegated to non-lawyers, or ignored. Other times, the parties insert boilerplate language, such as the language found in an AIA Form, without considering how that language might impact the particular project. As with other construction contract provisions, while the AIA Forms can provide a good starting point, the parties should not accept insurance provisions without understanding how these clauses will operate.

These pitfalls highlight why contracting parties should not simply accept boilerplate AIA subrogation and insurance provisions without carefully considering how they might impact the project.

Listen as our expert panel reviews and advises on each of these provisions and discusses how these provisions can help ensure that all parties effectively minimize and shift the risk to the intended parties and their insurers.

Outline

  1. Overview of subrogation in AIA construction contracts
    1. Insurer consent
    2. Scope of the waiver
    3. Definition of "work"
  2. Relationship between waiver of subrogation clause and other potentially relevant contract language
  3. Impact on all parties to the contract
  4. The interplay of subrogation and builder's risk
  5. Recent case law: interpreting waiver provisions

Benefits

The panel will review these and other key issues:

  • What is generally the scope of a construction subrogation waiver in AIA Forms?
  • How can subrogation clauses be specialized to clarify issues of insurer consent, the scope of the waiver, and how work is defined?
  • What is the interplay of subrogation and builder's risk insurance?
  • How are courts interpreting waiver of subrogation provisions in construction defect matters?
  • What other contractual provisions will courts look at when interpreting the waiver of subrogation provision?