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This is a subject that has come up in the past and will continue to be a subject of contention between owners, primes, and construction staking subcontractors.  A related subject is the insurance coverage requirements in public works contracts, but this post is only concered with the indemnification clauses.  There was a time when the civil engineering/land survyeing company of which I am a partner would blindly accept these clauses without giving much thought to them.  A few years ago, we changed E&O insurance carriers and they put us in touch with a rep who presented us with information that changed the way we look at contract indemnification clauses.

Since then, we have developed a policy of striking any indemnifications that ask us to indemnify the prime and the owner for errors, acts, ommisions, or negligence by the indemnitees.  We accept full responsibility and indemnify everybody for the things our surveyors or our staff does, but not what people outside of our direct control do.  For private developments, this usually means some negotiations and explanation, but it has not yet been a deal-breaker for any project because the owners/contractors understand our position and do not really have much of an argument to the contrary.  When it comes to public works contracts, from project managers and agency risk managers, we have encountered incredible arrogance and a breathtaking indifference to fairness when it comes to the assignment/assumption of risk.  It seems as though they believe indemnifications should flow downhill, with the lowest tier bearing all of the responsibility regardless of the other protections already in place or the percentage of the contract their work represents.

The attitude we typically encounter from the bureaucrats and the primes is, "if you don't like it, you don't have to work on this project."  It is appalling to us that construction staking surveyors should assume the same risk that a grading subcontractor or a framing subcontractor assume.  The main reason it is unfair and overdue for a statutory resolution is that surveyors do not represent the same level of risk in a project as the other trades and our compensation is usually, at most, on the order of 1%-2% of the contract price.  We don't build anything.  Our equipment does not represent a hazard to the jobsite or to other workers.  If anything, other trades typically run over our stakes and destroy our work, and it is never the other way around.

Why should land surveyors, who cannot be viewed as potentially dangerous to anyone or anything, be forced to indemnify parties like the GC's who routinely work with, around, and in dangerous situations.  Further, the contract language typically requires us to assume the risk for bad designs, which we will dutifully stake exactly according to plan under the assumption that the engineers were qualified and the plans were reviewed multiple times.  They ask us to indemnify the owners and primes for anything they might do, with the only exception being whether the particular act is prohibited from indemnification by law.  There are very few things that cannot be indemnified against by statute.  It is entirely unfair that land surveyors share the same risk as the other trades when most of our work done well before the construction crews are finished, so our exposure is much less than other trades.  We believe that land surveyors should only be held liable or be forced to indemnify others for those acts, errors, and ommissions directly related to our work.  We don't stand to gain as much as the GCs, therefore we should not be expected to assume the same risk.

Another reason it is unfair is that land surveyors are licensed professionals, not contractors.  We are held to a higher standard by virtue of our licenses.  We carry E&O insurance over and above general liability insurance.  If we do something in the course of our work that damages the owner or the prime, we are subject to discipline by state boards.  I have no problem with land surveyors being held responsible for things related to surveying, but we should NOT have to bear the same risk as the prime.

I encourage all of you who are involved in the contract negotiations for your firms to look closely at these indemnification clauses.  If more of us would unite against these unfair contracts, the practice by bureacrats and paranoid governement lawyers would stop.  If every land surveyor just said NO to these unfair practices, the agencies would have no choice but to assume some of their own risk rather than pass it on to the people who are providing them services. How do you deal with these clauses, because we are actually considering no longer chasing public works jobs.  There is simply too much risk, too much headache, and very little to be gained over private contracts.  If you have other ideas or a difference of opinion, I would love to get your feedback.

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