Agreements to Allocate Covid-19 Risk

By Larry Lubka

Until such time as the legislature addresses liabilities arising out of Covid-19, there is a risk to all owners, contractors and subcontractors that liability could arise as a result of Covid-19.  Whether signed as a confirmation of duties or as a change order, it is useful for all the parties on the project to understand the allocation of risks.

It may be that you and your attorney have concluded that your contract already contemplates those risks and that all you need to do is confirm the obligations (see Confirmation of Duties below). 

However, some will argue that contracts signed before Covid-19 was known don’t fully cover the risks.  To that end, I’ve added a Hold Harmless Agreement / change order below which can address any of your contract relationships.  The key here is to be sure that change order is supported by consideration.  I’ve given an option of a specific amount of consideration, which you can change as you think is appropriate.  The alternative is to determine or negotiate an amount covering out of pocket costs, such as masks and other protective gear which the other party will need to purchase.  Others may want to go a step further and include all claim amounts, such as the inefficiencies incurred as a result of a 6-foot separation, but that would call for a more detailed change order which is beyond the scope of what I submit here. 

Finally, I’ve given choices such as [Owner][Contractor] and [Contractor][Subcontractor].  You are to pick one term and strike the other.  So, for example where it says [Owner][Contractor], the document will show “Owner” or it will show “Contractor”, but not both.  Call me if you have any questions.  You might also want individual employees to sign a similar agreement.  I can put you in touch with Jeff Epstein of Lubka & White LLP if you have any questions regarding such an agreement.  Please see his earlier writings on Covid-19 topics, such as employees working from home.

Hold Harmless Agreement [Form]

            As you are aware, Covid-19 is a worldwide Pandemic.  The virus is very contagious, the exact mechanisms of its spread are not wholly understood, although close contact and contaminated surfaces can spread the virus.  The virus does not always show symptoms.  Covid-19 can result in severe illness and death.

[Contractor] [Subcontractor] acknowledges that it has and will at least weekly apprise itself of all local, state and Federal rules regarding Covid-19, with particular regard to worker and personal safety rules and regulations (“Requirements”).  The parties understand that failure to abide by all current and future Requirements can lead to illness and possible liability.

            [Contractor] [Subcontractor] is wholly responsible for implementation of the Requirements as it applies to its workers, as well as other personnel and persons exposed to its work.  [Contractor] [Subcontractor] agrees as to the Requirements and affirms as to its other contractual obligations to give all required notices, submit all forms and comply with all actions required by the Requirements.  Such notices shall include postings, submitting information and guidance to its employees regarding Covid-19.  [Contractor] [Subcontractor] shall also provide protective equipment, such as masks, gloves and visors to its employees as provided for in the Requirements.

            This hold harmless agreement is a change order to that certain contract dated _______ by and between [Contractor] [Subcontractor] (hereinafter the “Contract”). This change order shall provide for consideration of [$50.00] [cost of estimated out of pocket costs for Covid-19 precautions] to be paid to [Contractor] [Subcontractor].  This hold harmless agreement is subject to all of the terms and conditions of the Contract.

            The undersigned waives and releases its right to file suit against [Owner][Contractor] and its owners, officers, directors, managers, officials, trustees, agents, employees or other representatives in connection with exposure, infection, and spread of Covid-19 relating to using [Contractor] [Subcontractor]’s services on behalf of [Owner][Contractor].  This waiver and release gives up your right to bring any claims, including, by way of example and without limitation, claims for personal injury, death, disease or property damage, including those resulting from negligence.  

            To the extent allowed by law, [Contractor] [Subcontractor] shall pursuant to the contract and this hold harmless agreement, indemnify [Owner][Contractor] from and against any fines, damages, liabilities or claims, including, as examples only, claims by [Contractor] [Subcontractor]’s employees and invitees against [Owner][Contractor].  [Owner][Contractor] and [Contractor] [Subcontractor] resulting from Covid-19, except for such claims occurring as a result of [Owner][Contractor]’s sole or gross negligence.   [Contractor] [Subcontractor] shall promptly give written notice of any claim or potential claim in accordance with the notice and claim requirements of the Contract.

            This Hold Harmless Agreement is not intended to change or limit obligations already existing in the Contract.

            [Contractor] [Subcontractor] shall require that its employees, its subcontractors, of any tier and its invitees to the project, enter into an agreement waiving and releasing [Owner][Contractor] from all Covid-19 claims.  Copies of those agreements will be provided to [Owner][Contractor]. 

Date _______________

Signature ___________________________________________________

Signature ___________________________________________________

COVID-19 Confirmation of Duties [Form]

[Contractor] [Subcontractor] acknowledges that it has and will at least weekly apprise itself of all local, state and Federal rules regarding Covid-19, with particular regard to worker and personal safety rules and regulations (“Requirements”).  The parties understand that failure to abide by all current and future Requirements can lead to illness and possible liability.

            [Contractor] [Subcontractor] is wholly responsible for implementation of the Requirements as it applies to its workers, as well as other personnel and persons exposed to its work.  [Contractor] [Subcontractor] agrees as to the Requirements and affirms as to its other contractual obligations to give all required notices, submit all forms and comply with all actions required by the Requirements.  Such notices shall include postings, submitting information and guidance to its employees regarding Covid-19.  [Contractor] [Subcontractor] shall also provide protective equipment, such as masks, gloves and visors to its employees as provided for in the Requirements.

            This confirmation contemplates and confirms the existing terms and conditions set forth in contract dated ___, 20__ between the parties hereto.

            To the extent required by contract and allowed by law, [Contractor] [Subcontractor] shall indemnify [Owner][Contractor] from and against any fines, damages, liabilities or claims, including, by way of example and without limitation, claims by [Contractor] [Subcontractor]’s employees against [Owner][Contractor].  [Owner][Contractor] and [Contractor] [Subcontractor] shall promptly give written notice of any claim or potential claim in accordance with the Contract.

            [Contractor] [Subcontractor] shall require that its subcontractors, of any tier, enter a similar written confirmation of duties.  [Contractor] [Subcontractor] shall also obtain a waiver of liability against [Owner][Contractor]

Date ________________

Signature ___________________________________________________

Signature ___________________________________________________

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