AIA Contracts and Construction Insurance: Risk Transfer, Subrogation Waivers, and Builder’s Risk Policies

Course Description

Waiver of subrogation provisions in standard boilerplate language in the AIA form, in their simplest form, provide that the parties waive their rights to sue each other for losses covered by their insurance. Although it may seem straightforward, there are several potential pitfalls that counsel and parties should consider when negotiating their contract.

Principles

• Understand the Purpose and Function of Subrogation Waivers
  • Identify the risks addressed by waiver-of-subrogation provisions and understand how these provisions allocate responsibility for insured losses among owners, contractors, and other project participants.
• Analyze the Scope and Effect of Standard AIA Waivers
  • Understand how waiver provisions operate in commonly used AIA contract forms, including which losses and parties are covered and where the standard language may create unintended consequences.
• Coordinate Contractual Risk Allocation with Insurance Coverage
  • Evaluate subrogation waivers alongside builder’s risk and other project insurance requirements to ensure that contractual risk allocation is consistent with the available insurance coverage.
• Identify and Address Common Contractual Pitfalls
  • Recognize potential gaps, ambiguities, and conflicts involving waivers, insurance obligations, deductibles, uninsured losses, and the rights of insurers, and understand how these issues can affect claims and recovery.
• Tailor Standard Contract Language to the Project
  • Assess when revisions to standard AIA provisions are appropriate and negotiate modifications that reflect the project’s specific risks, insurance structure, parties, and desired allocation of responsibility.

Syllabus

1. Risks managed through subrogation waivers
2. Extent of waivers in common contract forms
3. Available revisions to meet project needs