Protecting Specialty Trade Partners in California

When protecting Trade Partners in California and aiming to minimize defense and indemnity payments in construction defect cases, it is important to be proactive and take certain steps.

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Here are some considerations:

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Contract Review: Carefully review and negotiate the terms and conditions of your subcontracting agreements and OCIP manuals. Pay particular attention to the indemnification and defense clauses. Seek an insurance professional and legal counsel familiar with this space?to ensure the terms are fair and align with California law. Specifically, AB 2738 and SB 474 will serve as a solid starting point.

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Understanding the Law: Familiarize yourself with California's construction defect laws, such as SB800 (also known as the Right to Repair Act) and the legal requirements for tendering defense and contribution claims. Knowledge of the law will help you navigate the process effectively.

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Compliance with Notice Requirements: Strictly adhere to any notice requirements outlined in your contracts and applicable laws. Ensure that you provide timely and proper notice to the general contractor or project owner if you are facing a construction defect claim.

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Documentation: Maintain detailed records of your work, including contracts, invoices, change orders, and any other relevant documents. Accurate and organized documentation can help protect your interests and provide evidence if disputes arise.

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Prequalification: Collaboration is key. Be selective when choosing projects and General Contractors/ Developers to work with. Conduct thorough due diligence on the Developers track record, financial stability, and reputation. Working with reputable and experienced Developers can help reduce the likelihood of construction defect claims. Look for true partners, a team mentality will be key in delivering projects on time and on budget.

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Insurance Coverage: Review your insurance policies, including general liability, pollution, professional liability coverage. Ensure that your policies adequately protect your business and provide coverage for construction defect claims. Consult with an insurance professional.

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Legal Representation: Consider engaging the services of an experienced construction attorney who specializes in construction defect cases. They can provide guidance, protect your legal rights, and help you navigate the complexities of construction defect litigation.

Conclusion: In conclusion, trade partners operating in California's construction industry must proactively protect themselves from the potential risks associated with construction defect cases. By carefully reviewing contracts, understanding relevant laws, complying with notice requirements, maintaining meticulous documentation, conducting thorough prequalification, securing appropriate insurance coverage, and seeking legal representation, trade partners can minimize defense and indemnity payments and safeguard their business interests. Implementing these strategies will help ensure long-term success and mitigate the challenges posed by construction defect litigation in California.

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Remember, each project is unique, and it is essential to consult with your insurance professional and legal professionals familiar with construction law and the specific circumstances of your business. They can provide tailored advice based on your situation and help you implement strategies to minimize defense and indemnity payments. This is not an exhaustive list and many factors must be considered.

Adam W. Gabler CCIP, CRIS, MLIS

?#insurancereview #contractors #riskmanagement

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