Large commercial entities almost universally require that service providers sign contracts with these provisions. It is important to understand the contractual requirements you are accepting, since failure to honor the terms of an agreement may result in contract breach, potential legal liability and loss of an important client. If you have questions, ask your insurance representative and/or consult an attorney. Examples of the provisions follow:
1. Defense and indemnification issues arise in 95% of the court cases I defend. Essentially, the owner or property manager is attempting to shift responsibility for any claim arising from snow services, including claims for bodily injury suffered in slip and falls, to the snow contractor. These clauses are accepted by courts, although there are always exceptions.
Indemnification and defense: To the fullest extent permitted by applicable law, The Contractor shall indemnify, defend and hold harmless The Owner/Property Manager from and against all liabilities, obligation, claims, demands, causes of action, and losses, including, without limitation, costs, expenses and attorneys’ fees, arising out of, based upon, occasioned by or in connection with The Contractor’s performance of, or failure to perform, the duties and services under this Agreement.
Responsibility of contractor for claims: It is expressly understood The Contractor is responsible for performing the services required under this Agreement. It is expressly understood The Contractor, and not The Owner/Property Manager is to be held responsible for slip and fall claims related to The Contractor’s performance or failure to perform services under this Agreement.
2. Property management companies and large retailers will routinely require proof that the contractor is covered under an insurance policy containing sufficient limits. Most will also demand coverage for themselves. It is critical that you make your insurance representative aware of all such requirements.
Insurance coverage: The Contractor must provide proof of General Liability Insurance with a coverage limit not less than $1,000,000.00 per occurrence and an aggregate limit not less than $2,000,000.00, Worker’s Compensation insurance for all employees with a limit not less than $1,000,000.00, and Auto Liability insurance with limits not less than $1,000,000.00 per accident. Sample of certificate of insurance is provided.
Additional insured coverage: The Contractor will provide The Owner/Property Manager with appropriate certificates of insurance and shall name The Owner/Property Manager as additional insured(s) on such insurance certificates. Insurance coverage for The Owner/Property Manager must be primary and noncontributory. The certificate of insurance must acknowledge coverage for snow clearing services.
The requirement that coverage must be primary and noncontributory is significant, because the commercial entity is essentially demanding the insurance supplied by the snow management company cover the commercial entity before any policy of insurance the commercial entity secured for itself.
3. Commercial entities will require that the snow and ice professional accept responsibility for any property damage caused by snow clearing operations.
Physical damages: The Contractor shall assume responsibility to repair any damage The Contractor’s employees, vehicles and/or equipment may cause to property or persons while performing operations under this contract. The Contractor’s payment may be withheld until such time as The Owner/Property Manager deems any damages corrected.
4. Finally, large commercial entities want contractual clarification that the snow and ice management company is not an employee of the large commercial entity, but is an independent contractor. The commercial entity is attempting to protect itself from potential liability and responsibility for expenses and coverage related to workers’ compensation, unemployment compensation and tax withholding.
No employment relationship: The Contractor expressly confirms there is no employment relationship created by this Agreement. The Contractor is engaged as an independent contractor and will not be considered an employee of The Owner/Property Manager. Should any court or agency determine an employment relationship has or will be created through the performance of this Agreement, this Agreement shall immediately terminate.
Darryl Beckman founded Beckman Roth Ogozalek, which has offices in New Jersey
and Pennsylvania. Contact him at firstname.lastname@example.org.