Contractors that outsource work to vendors may find themselves in a contract dispute over accident liability. In a recent contract dispute, The Georgia Court of Appeals issued a ruling in favor of the estate of a deceased worker against the city of Atlanta and its contractors, Holder Manhattan Moody and Hunt (HMMH). HMMH was contracted by the city to construct the International Concourse at Hartsfield Jackson International Airport, and A&G was a subcontractor to HMMH. In 2007, a worker was killed when a truck owned by A&G Trucking Incorporated struck him on the jobsite.
HMMH is part of a Contractor Controlled Insurance Program in which it, as a general contractor, provides insurance for its workforce. HMMH was recently required by the city of Atlanta in its contract to enforce this downstream requirement on all of its subcontractors, such as A&G. A&G Trucking carried $1 million in liability coverage at the time of the incident, even though the trucking company was contractually required to carry $10 million in its subcontract with HMMH. Had A&G carried the full $10 million dollars, it would have had sufficient funds to cover the wrongful death judgment of $5.75 million that the worker’s estate obtained.
This ruling by The Georgia Court of Appeals impacts all Georgia contractors that use a Contractor Controlled Insurance Program and it could mean millions of dollars in liabilities. General contractors are strongly being urged to include language in their contracts that specifically states: “There are no intended third-party beneficiaries of this contract.” This type of language would prevent a decedent’s estate from pursuing wrongful death damages, as occurred in this situation.
Source: The Atlanta Business Chronicle, “ATL Airport case cautionary for contractors,” Douglas L. Rieder, Nov. 7, 2011