1. Contract Language and Risk Management from Legal Perspective
Joshua Ferguson, Esquire

2. Managing Risk to Protect YOUR COMPANY
In order to properly manage risks the parties must understand those risks
Throughout the process, from bidding through billing and collections, the all entities involved need to constantly ask “Have we done enough?”

3. How Do Personal Injury Claims Against Contractors Arise
Poor quality of work
Lack of site planning, documentation of existing property conditions
Poor post-service documentation
Negligence of employees
Negligence of clients
Lack of thorough contract
Lack of agreement on scope of work with the customer
Inadequate transfer of risk (subcontract agreements)
Subcontractor does not fulfill scope of work
Negligence of sub- contractors

4. Protecting Your Company From the Beginning
Reducing the Frequency of Claims by Mitigating Exposure by changing/modifying the following:
Execution plan
Documentation
Employee Training
Contract Negotiation
Change the way you prepare, perform and follow-up your job duties
Change the way you document consistent with ASCA industry standards

5. Develop a Service Plan Developing the plan Importance
Who is in charge of “making the call”
Leave nothing to chance
Importance
Organized attack
Maximize productivity
Everyone will be on the same page
Limit the risks
Methods of Fighting the Storm: this will be the meat of the plan and should detail what equipment you will use and where, who will operate that equipment and which areas to clear first. The plan should be as specific as possible and should be minutely detailed. This will ensure that everyone knows exactly what to do if a crewmember cannot participate for any reason. This plan should be self-sufficient, so that anyone can follow its content and detail.
Communicate is Key to Success

6. Why Documentation is so Important
There is a direct connection between the length and breadth of a companies loss runs and the documentation policies of those companies
Why do I need to maintain documentation?
In the claims process and litigation, written documentation created near in time to the service performed holds greater weight than a person’s word that the service took place.
Notes for Elaboration on First Bullet Point
Lack of documentation can be the death knell in litigation, resulting in the loss of a case at trial and/or the matter settling for a higher payout.
Notes for Elaboration on Second Bullet Point
1. People tend to protect their own interests, which in litigation means saying what benefits them most. As such, documentation that was prepared without anticipation of litigation is more trustworthy than someone’s self-serving statement given during litigation that lacks documentation to support it.
2. A proper document management process shows that you are a diligent, organized company that can be trusted. It will also refute what anyone says to the contrary.

7. Documentation Before Incident
Employee training documentation
Qualifications/ Investigations related to subcontractors
Pre-site inspection records
(Photographs)
In-event documentation
(Photograph before and after)
Companies that do not have proper contracts, site inspection records, in-event documentation or post-event documentation procedures in place are more likely to get sued and more likely to have large verdicts or settlements in the cases they are named in

8. Documentation After Incident
Post-event documentation procedures
Log notes or invoices for each service
including name of employees on site, work performed, exact time performed, equipment used, and materials used
Follow-up inspection
Change orders/Purchase orders
Communication with Client

9. Pictures, Pictures, Pictures
Take pictures of everything
Pre-Site Inspection
Before and After Services
Follow-up Inspection
End of the Season

10. The Contract
All contracts should be confirmed in writing and executed by both parties
Key provisions:
Scope of services should define initial trigger; mean, manner and method of service; any follow-up obligations
Indemnity provisions

11. Problems Created from Poorly Written Contracts
Who is on the hook?
Lack of agreement on scope of work with the customer
Inadequate transfer of risk (subcontract agreements)
Lack of incentive by client/customer to timely pay
Negligence of sub-contractors
Watch out for claims of negligent hiring/supervision

12. Contract Negotiations – Scope of Work
It should define specifically how, when, and where the professional will perform operations
It should define exact payment terms, and penalties connected with failure to pay (termination of contract, interest, additional rights in recovery process)
The more ambiguity in the contract, the more we are at the mercy whatever the parties to a lawsuit testify to several years after the incident
How much discretion is left to the contractor?
Does the client have to approve or sign off on services?
Elaboration Bullet Point 3
The less duties a contractor takes on, the less risk they are exposed to
If they are subbing out work, they need to require this same level of detail from the sub-contractor
Elaboration Bullet Point 4
If so, culpability is limited if and when you obtain the sign off

13. RECOMMENDATIONS TO STRENGTHEN DEFENSE OF CLAIMS
Contract language additions
When executing on client paper, consider adding liability limiting language into the scope of services (potentially attached as exhibit). Some examples of language recommended:
Contractor will not be responsible for snow or ice that results from defective site conditions, including but not limited to drainage of down spouts, roof, balconies, awnings, canopies or improper grading, blocked or insufficient storm or water drains. Further, Contractor will not be responsible for claims that arise due slip and falls on painted curbs or parking stops.
Elaboration Bullet Point 3
The less duties a contractor takes on, the less risk they are exposed to
If they are subbing out work, they need to require this same level of detail from the sub-contractor
Elaboration Bullet Point 4
If so, culpability is limited if and when you obtain the sign off

14. RECOMMENDATIONS TO STRENGTHEN DEFENSE OF CLAIMS
Examples continued:
Contractor will not plow within two (2) feet of parked vehicles, cart corrals, or in between parking stops and vehicles. Further, Contractor will not plow in between parked vehicles.
Client understands it maintains a responsibility to inspect the Work performed by Contractor to determine if it is satisfactory and to their specification. If client does not advise Contractor that there is a need for additional snow removal or de-icing services, then the parties hereby agree that Contractor has satisfactorily performed its contractual duties at the time.
Elaboration Bullet Point 3
The less duties a contractor takes on, the less risk they are exposed to
If they are subbing out work, they need to require this same level of detail from the sub-contractor
Elaboration Bullet Point 4
If so, culpability is limited if and when you obtain the sign off

15. RECOMMENDATIONS TO STRENGTHEN DEFENSE OF CLAIMS
Examples continued:
Contractor will not plow within two (2) feet of parked vehicles, cart corrals, or in between parking stops and vehicles. Further, Contractor will not plow in between parked vehicles.
Client understands it maintains a responsibility to inspect the Work performed by Contractor to determine if it is satisfactory and to their specification. If client does not advise Contractor that there is a need for additional snow removal or de-icing services, then the parties hereby agree that Contractor has satisfactorily performed its contractual duties at the time.
Elaboration Bullet Point 3
The less duties a contractor takes on, the less risk they are exposed to
If they are subbing out work, they need to require this same level of detail from the sub-contractor
Elaboration Bullet Point 4
If so, culpability is limited if and when you obtain the sign off

16. RECOMMENDATIONS TO STRENGTHEN DEFENSE OF CLAIMS
Examples continued:
If client declines to have the Contractor apply the Services to any portion of the Premises, the Owner acknowledges that the Contractor is not responsible for any damages or claims whatsoever relating to or caused, in whole or in part, by the failure to apply the Services to the Premises in any particular circumstance
Client shall defend, indemnify and hold harmless Contractor, it’s owners, agents, consultants, employees, and subcontractors, from all claims for bodily injury and property damage that may arise as a result of any acts or omissions by Customer, its agents or employees.
Elaboration Bullet Point 3
The less duties a contractor takes on, the less risk they are exposed to
If they are subbing out work, they need to require this same level of detail from the sub-contractor
Elaboration Bullet Point 4
If so, culpability is limited if and when you obtain the sign off

17. Contract Negotiations – Hold Harmless or Indemnification
What is it?
It is an affirmative assumption of the financial consequences for liabilities of another through a contract
Why is it important?
Protects parties from being held responsible for the negligence of others
Often required by the property manager or owner, and can be required by the insurer in certain situations
Can significantly effect exposure and liability
Anti-indemnity bill will help contract language negotiation power

18. Indemnification and Hold Harmless - Examples
Look for broad, sweeping language such as:
Contractor agrees to indemnify, defend and hold harmless property owner/tenant/property manager from and against any and all claims and liabilities incurred by owner based upon, arising out of or in any way related to the services contemplated by this contract 
Contractor shall indemnify, defend and hold harmless customer from and against any and all claims, whether actual, threatened or alleged, arising out of or in any way connected from any act or omission by Contractor

19. The Contract Other areas of focus in the contract:
Payment terms should be well defined
Limitation on responsibility for Acts outside of contractor’s control (Anti-Indemnity bill strengthened bargaining power)
Ability of parties to terminate agreement
With or without cause
Right to correct errors
Penalties following termination

20. Contract Negotiation Tactics
Try to get client to sign your contract.
If you are forced to sign on client paper:
First, ensure that the scope of work, indemnity, payment, and termination sections are well defined and fair.
If possible, attach your own scope of work as an exhibit, and incorporate protective language within that scope of work.
Have counsel and your broker review contracts with troubling language.
If client does not let you alter their contract, try to get protective language in through a detailed scope of work exhibit/addendum

21. Joshua Ferguson, Esquire
Any Questions?
Joshua Ferguson, Esquire