Premises Liability

This Wisdom of the Crowd, compiled from questions and responses posted on the various eGroups*, addresses issues involving premises liability regarding third-party workers, contractors, and geocachers. The issues discussed include:

I. Liability to Third-Party Workers on Your Premises
II. On-Site Contractor Liability
III. Geocaching Liability

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* (PERMISSION WAS RECEIVED FROM THE ACC MEMBERS QUOTED BELOW PRIOR TO PUBLISHING THEIR EGROUP COMMENTS IN THIS WISDOM OF THE CROWD RESOURCE.)

I. LIABILITY TO THIRD-PARTY WORKERS ON YOUR PREMISES

Question:

What are best practices when having third parties come onto your premises to do work - such as where a plumber comes to do a repair, a carpenter comes to build shelves, etc. Typically these types of jobs do not entail a formal contract but rather a quote or proposal. My concern is where the third party is injured on our premises or causes some kind of damage. Does it make sense to add language to the quote/proposal stating the insurance requirements of the third party and naming us as additional insured and then requiring a Cert of Insurance? Would this apply also to subcontractors of the third parties? If there is a sub then we would not have a direct agreement with them so how would insurance requirements be handled? Any thoughts/wisdom on this would be much appreciated.

Wisdom of the Crowd:

Response #1:

I do not know if this is a "best practice" or not, but our purchase order contains a section that specifically deals with work done on our premises. It contains our standard insurance requirements. Do we actually get certificates from each and every firm performing services, no matter how small? Indeed we do. PACCAR does heavy industrial manufacturing; unfortunately, we've had a couple of [sub]contractors die on our premises over the last several years. Scrupulous attention to risk management manages risk. Our purchase orders are typically issued electronically. These terms are included at the end of the .pdf that goes out with every order. With smallish type, the entire set of terms comes in at four pages. The Purchasing people think that it's "too many words" but the electrons don't care.

Forgive the length, but I include the supplement in its entirety here.¹

Response #2:

Your general liability, general property and work comp policies would each cover a part of these risks. The main issue would be to make sure that the worker is licensed and carries insurance. For small (low dollar) jobs, some representation by the contractor would be sufficient (i.e., a reference to their license and insurance in their marketing materials). For larger jobs and/or where the contractor has routine access to your premises for long periods of time, actual proof might be necessary. (You would require that they are licensed and carry insurance and provide proof that they do). You may want to have a contract, especially if the job is routine (for example, a maintenance contract); you can look at the risk shifting then.

For the largest jobs, it would [be] expected to have a contract in force, and as the owner (client), you would expect the contractor to be licensed and to carry insurance and to name you as an additional insured. The issue is time/hassle vers[u]s risk/cost. I doubt it would be worth the effort on a small, one-off job for the contractor to have you named on their insurance and unnecessary because you would be within the class of risks assumed by the contractor's insurer and your own insurance. The amount of vetting you do should be controlled by the amount of risk presented. This is why you carry a business owners set of insurance products; to save the time and hassle of vetting every one-off contractor that comes on your premises. ²

Response #3:

For trade contractors like plumbers, I think you will be reasonably safe if you simply validate that they are licensed and bonded, and that the size of the bond is big enough to cover any damage they might realistically cause. We typically require an insurance certificate if a contractor will be accessing the company's computer networks from a non-company-issued computer or device, however. ³

Response #4:

One thing to keep in mind is if you lease your property. Your lease may contain a requirement that any contractor doing work on the premises provide certificates of insurance naming the landlord as an additional insured. ⁴

Response #5:

You should have a section on insurance and indemnification or a hold harmless.

Ask for workers compensation evidence, state disability, general liability and auto with additional insured for company (certificate holder) including elected and appointed officials, employees and volunteers.

Consider any other coverages—professional liability, etc.. ⁵

Response #6

Remember that in most states, the WC coverage that you may demand that the outside provider have for its own employees who are working on your site will explicitly waive any liability on the part of the third-party employer for enhanced sorts of tort damages that might be claimed by the injured employee who got hurt on your site. Thus, the employee may well have medical bills, lost wages and similar damages claims covered by way of WC, but the pain and suffering claim (and the like) will be waived against the employee's employer because of WC law -- But not against you! Thus, unless you get some sort of indemnity from the outside provider for those kinds of claims, you, as the customer, are generally left holding the bag, on your own nickel, to cover that claim if the employee seeks it. Fortunately that seems to be a relatively rare occurrence, but I can attest to the notion that it is not a non-zero possibility. (And, if the claim is for willful negligence, you may not even have insurance to cover it. But, hopefully, the claim will sound in garden-variety negligence, and then your own CGL policy should normally kick in.)

To the point of the original poster, I don't know if there's a good answer for what to do if 'getting a contract' is not really practical, other than acknowledging that it's a risk you can't totally mitigate. You can probably count on the outside provider having WC if it's an employee of a company of enough size that local law requires it, but that's not going to help with the super-small outfits (or if the individual on site is the proprietor and may not have WC coverage for his or her work). And, you may well have a basic claim outside of contract if the outside party causes property damage, although that's always a fun duty to define. Beyond that calculus, I guess the only good answer is that this is what insurance is for - risks you just can't make go away. ⁶

II. ON-SITE CONTRACTOR LIABILITY

Question:

We have a number of contractors on-site that do physical labor and don't necessarily follow the best safety practices. Do any of you have a form you require contractors to sign prior to working on your premises that protects you from contractor employee injury, claims, etc. and possibly suggests or requires certain safety precautions?

Wisdom of the Crowd:

Response #1:

Over the last few years, we've instituted an on-site contractor safety program. The Safety group and Procurement work together to qualify any contractor from a safety and qualifications standpoint. Their insurance is also checked during this process. The Law Department created a set of "tiered" agreements that run from either 18 pages for the most risky work to 2 pages for the run of the mill stuff. The effort was to try to avoid having a contractor come on site and doing some work without any contract at all. From prior experience, even without this safety framework as described above, companies usually have site safety policies that apply to any contractor coming on site. If they don't agree to follow site rules, they don't get to work on site. The rules allow the company to eject any company who doesn't follow the rules (or reserve the right to ask a company to eject any of its employee who don't follow rules). You could always add on a short indemnity and release form as well. Depends on what type of risk you face and how your company decides to handle. ⁷

Response #2:

While not exactly on-point, we have customers on-site at our locations and include the following clauses in our customer contracts:

"While on our premises, Customer, its employees, agents and invitees shall comply with all applicable policies, procedures, rules and regulation, including, but not limited to, security. Customer shall maintain Workers' compensation/Employers' Liability to fully comply with all applicable laws of the jurisdiction in which Customer's employee(s) will be present at our facility. The Parties hereby waive any right to subrogation they or their insurers may have arising from worker's compensation and/or employer's liability claims pursuant to this Agreement." ⁸

Response #3:

I know this doesn't exactly address your issue but thought it might save you some time drafting what you need.⁹

III. GEOCACHING LIABILITY

Question:

Has anyone had experience dealing with a geocache placed on your company's premises without permission? According to the geocache.com guidelines, players are instructed to first ask permission to hide a cache on private property. Our concern is not so much that a cache has been placed, but that it requires climbing a tree to access it - creating safety concerns. I plan to contact geocaching.com, but am curious if others have encountered this?

Wisdom of the Crowd

Response #1

I haven't experienced it as a lawyer, but am a geocacher with my kids. I think you will find that geocaching.com will be very responsive to your request, particularly for a safety issue. They have local cachers in each area that will contact the cache owner and require that it be moved. If they don't move it geocaching.com will take it off their site. (I know because we had to move one of ours due to erosion concerns.)

As a cacher, I would encourage all to allow caches that are safely placed and not disruptive to the business. It's really a great activity, and most cachers are very responsible. ¹⁰

¹Response from: Kevin Fay, Counsel, PACCAR Inc; United States (Small Law Departments, March 25, 2013).
² Response from: Jordan Gray, Senior Vice President, Compliance and Legal Affairs, WNC Insurance Services, Inc.; United States (Small Law Departments, March 25, 2013).
³ Response from: Hebe Doneski, Vice President, Deputy General Counsel, JDA Software Group; United States (Small Law Departments, March 25, 2013).
⁴ Response from: Diane Flyer, Attorney; United States (Small Law Departments, March 30, 2013).
⁵ Response from: Maryann Aiello, General Counsel, Salerno Brokerage; United States (Small Law Departments, March 31, 2013).
⁶ Response from: Michael Fleming, Senior Legal Counsel; United States (Small Law Departments, April 1, 2013).
⁷ Response from: Lee Braem, Senior Corporate Counsel & Chief Compliance Officer, Evonik Degussa Corp.; United States (Corporate and Securities Law, October 10, 2010).
⁸ Response from: Rebecca Bodnar, Senior Legal Counsel, Wallenius Wilhelmsen Logistics; United States (Employment & Labor Law, October 11, 2012).
⁹ Response from: Raimi Blackerby, Corporate Counsel and Global Director of Intellectual Property, TI Automotive, Ltd.; United States (Small Law Departments, October 11, 2012).
¹⁰ Response from: Gary Swearingen, VP Legal Affairs, Motricity, Inc.; United States (IT, Privacy & eCommerce eGroup, May 20, 2011).