Insurance and Indemnity Provisions in Commercial Real Estate Contracts: PSAs, Leases, and Construction Contracts Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1. THURSDAY, JULY 18, 2019 Presenting a live 90-minute webinar with interactive Q&A Zachary J. Crain, Shareholder, Nilan Johnson Lewis, Minneapolis Daniel J. Singel, Shareholder, McCollum Crowley Moschet Miller & Laak, Denver
The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1.
THURSDAY, JULY 18, 2019
Presenting a live 90-minute webinar with interactive Q&A
Zachary J. Crain, Shareholder, Nilan Johnson Lewis, Minneapolis
Daniel J. Singel, Shareholder, McCollum Crowley Moschet Miller & Laak, Denver
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Insurance and Indemnity Provisions in Real Estate
Contracts
Introduction Who We Are
What We Will Discuss Today
Why This Topic isImportant
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DAN SINGELMcCollum Crowley – Minneapolis and Denver
Inartful indemnity+Wrong insurance+Meaningless remedy provisions=$25,000,000 loss
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INSURANCEGENERALLY
IN PURCHASE
AGREEMENTS
IN LEASES
IN CONSTRUCTION
CONTRACTS
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INSURANCE \ GENERALLY
Contracts Ensure Indemnity is Insured Reasonable Insurance Refresh Track
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INSURANCE \ IN PURCHASE AGREEMENTS
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INSURANCE \ IN LEASES
Property Insurance
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INSURANCE \ IN LEASES
Liability Insurance
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INSURANCE \ IN LEASES
Other Considerations CAM increase Require Tenant Insurance Subrogation Waiver
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INSURANCE \ IN CONSTRUCTION AGREEMENTS
CGLBuilder’s RiskProfessional
Wrap Up
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INSURANCE \ IN CONSTRUCTION AGREEMENTS
TIPS
Indemnity Statutes AI Forms
Worker’s Comp AI Coverage
Employer’s Liability Terminology
Wrap Policies Subcontracts
Tenders
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INSURANCE \ IN CONSTRUCTION AGREEMENTS
TRENDS
Professional Coverage Pollution Liability
Cyber Liability Employment Policies
Captives
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INDEMNITYGENERALLY
IN PURCHASE
AGREEMENTS
IN LEASES
IN CONSTRUCTION
CONTRACTS
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INDEMNITY \ GENERALLY
They’re Contracts Public Policy
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INDEMNITY \ IN PURCHASE AGREEMENTS
Who pays for claims arising out ofBuyer’s due diligence?
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INDEMNITY \ IN PURCHASE AGREEMENTS
Who pays for claims arising out ofSeller’s breach of warranties orrepresentations?
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INDEMNITY \ IN PURCHASE AGREEMENTS
Other areas for Purchase Agreementindemnification:
Broker representation Escrow agent
Claims under leases Confidentiality
Tax exchange clauses Real estate tax exemption
Due diligence Subcontracts
Tenders
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INDEMNITY \ IN LEASES
Key Considerations1. No indemnity for willful/wanton2. Shifting negligence requires clear notice3. No indemnity for ‘basic duties’
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INDEMNITY \ IN CONSTRUCTION AGREEMENTS
It really doesn’t do us any good to havetort liability if people can actually avoidtheir tort liability.
- - > § 337.02
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INDEMNITY \ IN CONSTRUCTION AGREEMENTS
Section 337.02:
An indemnification agreement containedin, or executed in connection with, a buildingand construction contract is unenforceableexcept to the extent that: (1) the underlying injuryor damage is attributable to the negligent or otherwise wrongful act or omission, including breach of a specific contractual duty, of the Promisor . . .
GC and SUBspay their ownfault.
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INDEMNITY \ IN CONSTRUCTION AGREEMENTS
Section 337.05, subd. 1:
Permits agreements where “a promisoragrees to provide specific insurancecoverage for the benefit of others.”
The fine print (from 2013 amendment)…. GC cannot force SUB to insure GC’s negligence Construction bonds are ok “Project-specific insurance” ok (e.g., builder’s risk, wrap)
GC can shift vicarious liability to SUB’s insurers.
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INDEMNITY \ IN CONSTRUCTION AGREEMENTS
Section 337.05, subd. 2:
Permits broad-form indemnity wherethe subcontractor fails to acquire insurancethat it was obligated to purchase under thecontract and the claim arises within the scopeof the specified-but-unobtained insurance
GC can shift to SUB if SUB fails to insure.
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INDEMNITY \ IN CONSTRUCTION AGREEMENTS
GC Strategy1. Use court-vetted language2. Get signed subcontracts and certificates
of insurance3. Ensure SUBs obtain CGL coverage with
completed operations insurance4. Get AI coverage5. If litigation, tender to SUBS (indemnity provision)
and their insurers (AI)
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INDEMNITY \ IN CONSTRUCTION AGREEMENTS
SUB Strategy1. Negotiate the subcontract2. Reject tenders prohibited by state statute3. Reject defense of claims that are not
