6
PLAYBOOK TEMPLATES

Construction Build-Out Agreement

A Construction & Build-Out Agreement governs property improvements or fit-outs between owner and contractor. This playbook discusses scheduling, change order processes, and liability for defects.

Insurance Requirements

Why This Matters: Appropriate insurance mitigates financial risks from accidents, property loss, or third‐party claims. It prevents coverage gaps that could expose either party to significant liability.

Negotiation strategy

If you're the Tenant:

Ensure that the Contractor provides proof of insurance with adequate coverage limits. Require regular updates and notifications of any changes to the policy.

If you're the Contractor:

Negotiate for reasonable coverage limits that align with industry standards. Ensure that the insurance requirements are feasible and cost-effective.

Essential elements

1

Types of Insurance

Specify required insurance types.
2

Limits of Liability

Define coverage limits for policies.
3

Proof of Insurance

Require certificates and updates.

Action framework

ACCEPT

Propose edits if coverage limits are insufficient or if specific types of insurance are missing.

EDIT

Reject if the clause lacks essential insurance types or fails to provide adequate protection.

ADD

Add language for additional coverage in high-risk scenarios or specific project needs.

PRO TIP

Always consult with an insurance expert to tailor coverage to the specific risks of the project.

Example clauses

FAVORABLE

Comprehensive Coverage Clause

"The Contractor shall maintain comprehensive general liability insurance with limits not less than $1,000,000 per occurrence."
NEUTRAL

Standard Coverage Clause

"The Contractor shall provide proof of insurance upon request."
UNFAVORABLE

Inadequate Coverage Clause

"The Contractor may provide insurance at their discretion."

Fallbacks

High-Risk Projects

For projects in high-risk areas, such as flood zones, require additional insurance like flood or earthquake coverage to ensure adequate protection.

Short-Term Contracts

For short-term contracts, negotiate for temporary insurance policies that provide necessary coverage without long-term commitments.

International Operations

When operating internationally, ensure compliance with local insurance regulations and consider additional coverage for political risks.
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