How should a contractor respond when the owner or designer directs that some aspect of construction be accomplished in a fashion that the contractor believes will not be successful, violates applicable specifications or standards, or in the worst case, will result in an unsafe condition at the facility? While the preferred response is to decline the direction, that may not be practical if the contractor is already engaged in the project, or does not want to risk losing the work. In such circumstances, the contractor should call the issue to the attention of the owner and architect in writing, explain the potential consequences of following the direction, and obtain a written direction to proceed and an agreement not to hold the contractor responsible for problems resulting from construction in compliance with the direction. The agreement should include the agreement of the owner and designer to indemnify the contractor against any claims arising out of the condition at issue.

While the steps outlined above should be sufficient to protect the contractor from claims by the owner for failures resulting from the construction method in question, no agreement with the owner can insulate the contractor from a claim by a third party injured due to a unsafe condition resulting from the contractor’s work. If the direction results in a condition which will violate a standard related to safety, or otherwise can be anticipated to create an unreasonably dangerous condition, the contractor who proceeds takes the risk that a player will be injured as a result of the unsafe condition and will assert a claim against owner, designer and contractor. If the contractor is held liable for the player’s injuries, the indemnity agreement mentioned above should give the contractor a right to recover its losses from the owner and designer; however there is no assurance that the agreement will be effective, or that the owner or designer will be capable of fulfilling its obligations.

The contractor should be covered by its products liability/completed operations insurance coverage. Be certain to maintain appropriate overages and limits with a reputable and solid carrier.