In this age of outsourcing and specialization, constructioncompanies have to depend heavily on subcontractors and other thirdparty providers on most projects. The use of subcontractors helpsto ensure projects are completed in a timely and efficient manner,but it also creates a wide range of contractual risks.

Without a properly structured risk-transfer program, a general contractor (GC), owner or propertymanager would assume financial responsibility unnecessarily forlosses caused by a third party, who is contractually obligated tocontrol or prevent those losses. The financial impact could besignificant — more so in certain jurisdictions.

Take the case of a New York-based employee of an uninsured orunderinsured subcontractor injured on a jobsite.

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