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Fall 2014

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[ SAFETY MAT TERS ] Assuming you know who you want to hire, the most important steps are drawing up a contract and making sure your sub is adequately insured, say attorneys who specialize in construction litigation and insurance coverage analysis and litigation. "Often, the initial contract begins with an American Institute of Architects (AIA) Standard Form of Agreement," said Peter Balouskas, an attorney with Burke, Scolamiero, Mortati & Hurd, LLP in Albany, NY. A contractor/subcontractor agreement (available through AIA.org) is typically revised by the contractor's attorney before it goes to the subcontractor's attorney for review and further negotiation, he said. If an AIA agreement isn't used, the hiring contractor's attorney most often drafts the contract. "The basic contract terms can often be used for subsequent jobs; however, it should always be revised to comply with the scope of work specif c to the job and any other job specif cations or requirements," Balouskas said. "A standard contract should explain that the sub is an independent contractor and should specify what control the hiring contractor has and does not have," said Andy Rowlett, an attorney with Howell & Fisher, PLLC, in Nashville, TN. Rowlett explained that the general contractor is still protected from liability if he or she stops work or inspects the progress of the work, receives reports from the sub and makes recommendations, "that don't have to be followed by the sub. If you want to avoid liability for a sub's work, make sure you allow the sub to use his own methods and equipment to complete the job." Once a hiring contractor specif es how a job should be done, Rowlett said, exposure to liability may be an issue. MUST-HAVE LANGUAGE To guard against such exposure, said Kevin Burke, attorney and managing partner for Burke, Scolamiero, Mortati & Hurd, LLP, the contract also must have indemnif cation language within it that essentially says to the hiring contractor, "I defend, hold harmless and indemnify the hiring contractor to the fullest extent permitted by law for any and all losses arising out of or resulting from the performance of the work under the subcontract." Burke explained that this is called 'contractual risk transfer' and is critical for a general contractor's protection from being named in a lawsuit connected to the sub's performance. Legally, Balouskas said, both the contractor and subcontractor may limit or accept risk transfer between themselves in a contract. But typically, as a matter of law, said Balouskas, to protect the contractor, the contract obligates the subcontractor to accept risk transfer from the contractor. BY DEBRA GELBART G IVEN THE NATURE AND SEASONALITY of the paint business, it's a given that from time to time you'll need to bring on other crews to help complete big jobs. Whether it's a team of two or 20, extra hands are great for raising productivity. However, without the right contract and proper insurance in place, they also have the potential to raise your liability. 36 inPAINT | Fall 2014 Protect Yourself WHAT TO KNOW ABOUT SHIELDING YOUR BUSINESS FROM LIABILITY WHEN YOU HIRE A SUB

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