A key factor in limiting the Liability of Owners and Lenders is to verify the Insurance Coverage of the Contractors and Subcontractors involved in the building project. Trade Contractors to the fullest extent permitted by law shall indemnify and hold harmless the Owner. It is important to set the Policy Limits that will be required for the project that all the contractors, subcontractors, and sub subcontractors must carry.
The Contractors, Subcontractors, and Sub subcontractors must provide a Certificate of Insurance showing the policies in force for Workers Compensation, Business Automobile Liability Insurance, and Commercial General Liability Insurance prior to the start of the work. The contractor’s insurance company should be lawfully authorized to do business in the jurisdiction in which the project is located and should have a minimum A.M. Best Rating as specified for the project. The policies should contain a provision that the coverage required under the policies cannot be cancelled or allowed to expire until at least thirty days prior to written notice to the owner.
The Owner shall obtain and maintain a Builder’s Risk Insurance policy with minimum coverage limits equal to the full cost of replacement of the Project at the time of loss. The insurance should name the trade contractor, subcontractor, material suppliers, and architect/engineers as insured.
Prairie States Inc provides the program for logging all of the Certificates of Insurance for the contractors, subcontractors, and owner. The log includes the policy holder information and the insurance company information, the anniversary date of the policy, and alerts of any lapses of coverage.
Please Contact Us to discuss the Professional Services provided by Prairie States Inc to help Lenders to evaluate and monitor the Insurance Requirements for your clients Building Projects.
