Managing Risk Through Contract Language, one of the professional liability risk management tools available from Victor Insurance Managers Inc., reviews contractual demands by clients that could increase exposure or compromise professional liability insurance coverage and provides commentary and alternatives.
The new edition has been designed to serve as an essential risk management guide to the contracting process for design professionals. Design and construction projects involve a high degree of contracting (i.e., outsourcing) under conditions of high uncertainty. The result is often a complex and confusing web of business and legal relationships among a cast of project players that includes project owners, developers, design professionals, contractors, subcontractors, material and equipment suppliers, along with a supporting cast of lenders, insurance companies, and lawyers.
All these relationships create the need to sort out and allocate the respective roles and responsibilities of all participants in a coordinated and effective fashion while somehow addressing the uncertainties inherent in the design and construction process. Failure in this regard is a significant source of friction, disputes, and ultimately the use of some outside entity to resolve problems—often at great expense to the various parties. Effective pre-contract risk management must not only evaluate the pros and cons of specific contract forms or contract terms, but also the capacity and willingness of the various parties to work together, collaboratively and in good faith, to bring about a satisfactory project outcome.
Managing Risk Through Contract Language has been divided into three parts to provide you with a reasonably comprehensive, but practical understanding of contract law, professional liability, contract types, and contract terms. It offers a detailed table of contents as well as a “Finder’s Guide” to help you quickly find the sections you need. The guide covers how to use the publication, a discussion about contract revisions, and a listing of the various issues that can help you to determine whether the risks are reasonable and controllable.
This publication is one of the many risk management tools available to policyholders in the Victor and CNA professional liability program. It is made available by Victor through the AIA Trust as a courtesy to AIA members. You can benefit from this guide and the many resources offered to AIA members through the AIA Trust on the Victor Risk Management Resources page.