March 2005
      
Brought to you by Freds Insurance Incorp      
 
What You Should Know About Hold Harmless Clauses

By its nature, construction is a high-risk business. When a loss occurs - for example, a fire apparently started by electrical wiring - each of those involved in the project would prefer that “the other guy” pay for the loss. So-called “hold harmless clauses” in contracts are a way one party assures that the other party will pay for, or share the cost, of a loss. For the owner or general contractor, hold harmless clauses are a way to help keep insurance premiums lower by reducing risk exposure.
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Interpreting the Coinsurance Clause in a Builder's Risk Policy

As the name implies, the coinsurance clause - which is typically found in a builder’s risk completed value policy - makes the policyholder a co-insurer of risk. Under certain conditions, when there is a coinsurance clause, the insurance company will not pay the full amount of a loss; part will be borne by the policyholder. The advantage of buying insurance with a coinsurance clause is the policy’s premium will generally be lower than a similar policy without the coinsurance clause.
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Preventing and Uncovering Employee Fraud at Construction Firms

Construction projects typically involve the purchase of costly materials, the lease or purchase of equipment, and payments to subcontractors, resulting in significant accounts payable. It should come as no surprise that certain company employees might be in a position to accomplish substantial misappropriation of funds.
The risk of insider theft is almost always underestimated, as employers are inclined to trust their employees. Many construction executives and managers who tend to pay closer attention to reducing the risk of theft by strangers, may pay less attention to preventing theft by insiders. In addition, the size of the risk – in terms of the amount that could be lost -- may be grossly underestimated.
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