We have provided a fun video which at the end answers the questions: How can association protect themselves when a contractor violates city code? Does insurance cover the legal defense and fines in this case?
YouTube link: https://www.youtube.com/watch?v=UlKu13Epg3U
The generally used and most popular way for an association to protect itself in regard to the actions or inactions of contractor is an express defend, hold harmless and indemnification clause placed into any contract between that association and the contractor. In this way, the contractor should have to pay for the association’s defense should a lawsuit, or governmental punishment effort, start because of a contractor’s actions or inactions. Also, should the lawsuit result in a verdict (or the governmental action result in fines and/or penalties) by which eh association must pay damages, the “hold harmless” and “indemnification” terms should force the contractor to pay those damages. A few quick and fundamental points. First, to the extent possible, almost all contractor-provided services should be provided in conjunction with a written and executed contract. Second, that contract should have the aforementioned “defend, hold harmless and indemnification language. Third, if the board is inclined to execute a contract provided by the contractor not only must that type of provision be inserted but the contractor-prepared contract must be scrubbed of any conflicting terms. Lastly, the only way to have a contractor indemnify an association for that association’s own negligence (as opposed to the contractor’s negligence) is to have the “defend, hold harmless and indemnification” provision specifically reference the association’s negligence.
David Byrne (NJ/NY/PA) • Ansell Grimm & Aaron, PC •Princeton, NJ 08540 • firstname.lastname@example.org • www.ansellgrimm.com
Video Panelist: Raymond Dickey • AssociationHelpNow • www.AssociationHelpNow.com
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