Column and Beam

A blog for design and construction professionals.

Category: Limitation of Liability (page 1 of 4)

What You Need to Know Choice of Law

You’ve seen it in many contracts, it is a contract clause that states something like:

This Contract is governed by South Carolina law.

You might have even debated with your client which state should be inserted into the clause.  Many architect, engineers, contractors – and even some attorneys  – do not understand the implication and importance of a choice of law clause. 

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Subcontractors and Suppliers – Why Should You Send a Notice of Furnishing of Labor/Materials on Your Next Project?

On large construction projects, it is common for significant labor or materials to be supplied by lower-tier subcontractors and material suppliers – that is, entities who do not contract with the general or prime contractor, but instead contract directly with a subcontractor.  Without a direct contractual relationship, the prime contractor may not know the identity of all lower-tier subcontractors or suppliers.  As a result, the prime contractor may lack sufficient information to ensure that lower-tier subcontractors or suppliers have been paid before releasing payment to its subcontractor.  The prime contractor may first learn the identity of lower-tier subcontractors or suppliers when they contact the prime contractor claiming that they have not been paid for their labor or materials or when they file a mechanic’s lien or payment bond claim.

However, remote subcontractors and suppliers may avoid this situation by sending a Notice of Furnishing Labor or Materials to the general contractor before supplying labor or materials.  This provides notice to the prime contractor of the identity of lower-tier subcontractors and may help subcontractors get paid. 

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Protect Your Business – Steps to Avoid Personal Liability

Architects, engineers and other construction professionals, like all business owners, create business entities, like corporations and limited liability companies, to operate their businesses and to shield themselves from personal liability.  The liability shield is a primary benefit of establishing a business entity, because it protects the business owner and the officers and directors of a corporation from personal liability for acts of the company.  However, merely forming a corporation is not necessarily sufficient to avoid personal liability, since it is possible to “pierce the corporate veil” if a business does not maintain a separate identity from its owners or related entities. 

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Why You Should Consider Rectification Coverage

During the course of any design or construction project, there are various factors that can cause damages or delays, which can be financially costly and detrimental to your firm’s reputation.  For this reason, it is essential to have comprehensive liability insurance.  In recent years, many insurance carriers have begun to offer a new form of protection called rectification coverage which is available to contractors under their professional liability policy and to design professionals who have a lead role in design/build projects.

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5 Things You Need to Know About Cyber Insurance

Is your firm at risk for a cyber attack?  The answer may surprise you.  Attacks against all businesses are increasing, and though smaller companies may assume they won’t be targeted, Symantec’s 2016 Internet Security Threat Report found that 43% of all attacks in 2015 were against small businesses.  You can’t entirely prevent an attack, but you can protect your company by purchasing cyber insurance.  Here are a few things to consider.

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