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Hold Harmless / Release of Liability Agreements for Rehab Contractors
Does anyone have a template they require contractors to sign before starting a rehab project on a BRRRR or flip? I only consider licensed contractors but have found that most reasonably-priced contractors are not bonded or insured. As an alternative, I am requesting contractors to sign hold harmless and release of liability agreements.
@Jon B.
What state is this?
Every state I have worked in, as part of getting a license they must have proper insurance. If they are hiring 1099 employees that is between them as every contract I have is written they are to have insurance and provide a copy of their insurance certificate
I am in Oregon, I think we can only use licensed contractors here, unless it is my primary. Have you talked to your insurance company?
This is something id discuss with an attorney . Renovations are high cost items
Jon B.
Working with contractors without Insurance (General Liability and Workers Comp. at the minimum) is asking for problems:
1. The contractors work damages the rest of the structure. What do you do? Sue them (good luck, even if you win, will they have any assets to attached). Have them repair the work. Maybe. But if the loss was caused because of their poor workmanship do you want to have them redo it.
2. The contractor causes injury to someone visiting the property (instpector, delivery person, etc.). If the contractor has no Insurance you are more likely to be drawn into a suit by the injured party,
3. an employee of one of the contractors is injured on the job site. With the Contractor having no insurance again you are more likely to be drawn into an lawsuit.
I strongly recommend that you only use Licensed contractors with a good track record and with full insurance. Have your contracts with those contractors drawn up by a qualified Attorney. They should stipulate from an Insurance perspective that the Contractor provide you with proof of Insurance that:
1. names you as an additional insured
2. provides 30 day notice of cancellation
3. Is primary and non-contributory
4. waives subrogation against you
You also want an strong Hold Harmless and Indemnification Clause in the contract.