Contractual risk transfer programs for construction projects

Published July 19, 2017

Construction worker female_cropped.jpg


Account Executive

Economic times are good here in New England, with an ongoing construction boom both reflecting and feeding companies' healthy bottom lines. But whether you're a property owner or contractor, participating in a construction project involves risk. You carry enough of it yourself. Why assume responsibility for someone else's risk, as well?

Contractors and property owners working with third-party providers of products and services need a Contractual Risk Transfer (CRT) program to ensure the proper party is held accountable should injury, property damage, delay or defect occur. Getting hit with a claim due to a third-party's mistake could quickly turn your boom into a bust.

In a post entitled "5 ways to strengthen a contractual risk transfer program," the insurance industry trade website summarizes three reasons to pay close attention to contractual risk:

  • To answer leadership's questions when something goes wrong (most notably, "What does the contract say?").
  • To build better relationships among all parties involved in a project.
  • To avoid protracted legal struggles.

As an independent agency, Sylvia Group works with multiple insurance companies to protect contractors with customized coverage and risk-management programs. One of those companies is Travelers, which does an excellent job of outlining the components of strong Contractual Risk Transfer program here.

Those components include:

  • a written contract
  • an indemnification clause
  • insurance specifications
  • a certificate of insurance (COI)
  • an additional insured endorsement
  • record retention practices.

Travelers also offers a downloadable CRT Program Assessment Checklist.

Whille Sylvia Group and its clients have a great track record with Travelers, we also have designed quality insurance programs for contractors with coverage by other reputable carriers including Acadia, Hanover, Liberty Mutual and Selective. We'll be happy to work with you on a program that fits your needs and budget.

If you'd like to learn even more about CRT in the meantime, read Insurance Journal's comprehensive introduction, "Contractual Risk Transfer: The Basics." The piece serves as a glossary of CRT, providing concise explanations of terms such as:

  • Vicarious Liability
  • Joint Liability
  • Sole Negligence
  • Financial Risk Transfer
  • Indemnification, Hold Harmless and Waiver of Subrogation
  • Additional Insured
  • "Primary and Noncontributory" Requirement

As an alternative to all that reading, we're offering a free PowerPoint presentation from Zywave, creator of the MyWave Connect resource portal available to Sylvia Group Business Insurance and Employee Benefits clients. In addition to learning from the presentation, you may want to share it with others involved in a project you're working on — a client, a partner, an employer or subcontractor resistant to concept of Contractual Risk Transfer.

We're confident that anyone who views it will be convinced of the value in practicing CRT.  


 About Jill White and Sylvia Group

Jill_White_cropped.jpgLicensed as a Massachusetts Producer for property and casualty, life, and accident and health insurance, and certified as a Construction Risk Insurance Specialist (CRIS) and Workers Compensation Advisor (CWCA), Jill White combines insurance training with knowledge gained from 15 years in the financial services industry to develop a thorough understanding of each client’s unique business needs and challenges. Devoted to protecting her clients, their businesses and everything they’ve worked hard to achieve, Jill conducts a full and thorough review of each business to ensure clients understand exactly what they’re paying for: which risks and exposures are covered, which aren’t and what gaps may exist. She then explores all available options and works with the client to design the insurance program that best fits the business’ strategic plans and goals.

Sylvia Group helps businesses and individuals protect their future by designing insurance, benefits and financial planning programs. We’re a locally owned agency known for our commitment to our clients and our community, as well for our industry expertise. Founded in New Bedford, MA, in 1950, headquartered in neighboring Dartmouth, and serving businesses and individuals throughout Massachusetts, Rhode Island and beyond, Sylvia Group is certified as a Woman Owned Business Enterprise with the Massachusetts Supplier Diversity Office and has the distinction of being the first six-time recipient of the Five Star designation awarded by the Massachusetts Association of Insurance Agents (MAIA) for all-around agency excellence. 

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