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Contractor’s Guide to Waiver of Subrogation

Contractor’s Guide to Waiver of Subrogation

For nearly every job and every general contractor, there is a contract in place for subcontractors. As part of that contract, there are insurance requirements. Those insurance requirements usually include a requirement for a waiver of subrogation in favor of the general contractor and/or the project owner. The questions are: what is a waiver of subrogation, and should you give it to them? What is Subrogation? So what, exactly, is subrogation? The term itself translates to “in place of another”. In insurance terms, subrogation is the right of an insurer to attempt to recover money from another party for their involvement in a claim. For example you have full coverage auto insurance and you are involved in an accident for which you are not at fault. Your insurer pays your claim and then turns to the at-fault driver or his insurance company to recover the money paid to you. In contractor’s terms, if a subcontractor’s insurance pays a claim and the general contractor was wholly or partially responsible for the claim, the subcontractor’s insurance carrier may try to recover all or some of the money paid out on the claim. Why You Should Get a Waiver of Subrogation If you are a contractor and you work with subcontractors, it is a good idea to get a waiver of subrogation to protect both your insurance policy and your claims history. Here is how this works: Your policy is protected: Requiring your subcontractors to provide a waiver of subrogation means that if they are sued due to work done by a subcontractor on a job for you, their insurance company cannot...
Who Is Considered An Employee?

Who Is Considered An Employee?

The classification of a working person as an employee would seem to be an easy decision, right?  If you hire a person and you pay wages to that person on a regular basis then the person is an employee. If you didn’t technically “hire” him and you don’t actually provide his payroll, then he isn’t an employee.  Or is he? You may intend for employment status to be determined by contract negotiations.  However, it is most often determined by a labor board (in the event of a complaint) or in a courtroom (in the event of an injury lawsuit). The California Department of Industrial Relations, the Department of Labor and the IRS have much to say on the status of all types of labor and whether someone might be considered an employee, even if you didn’t hire them and even if you don’t pay them.  Let’s look at a few of these.   Is a Volunteer an Employee? This might seem like a simple answer.  If someone is volunteering, they aren’t being paid, so they wouldn’t be considered an employee.  This is true, except when they ARE considered employees. The key word when determining the employment status of a volunteer is intent.  What is the intent of the employer with regard to the volunteer, and what are the intentions with regard to the work being performed by the volunteer?   No. Non-employees intend to volunteer their services for public service, religious or humanitarian reasons without contemplating being paid.  These would include people volunteering after a disaster or even those volunteering regularly in a non-commercial operation such as a shelter....