A design, fabrication and construction contractor had uncertainty at senior and middle management level as to if, or to what extent, their insurance will respond under the contractual conditions agreed to with principals and head contractors.
Overall there was a need for greater understanding of the insurance response mechanism at the core operating insurance policies by this client. We assessed that a restructure of the contract negotiation framework would be required to remedy the insurance problems. Our goal was to provide clarity so our client could negotiate proactively, rather than reactively when dealing with principals and head contractors who were insisting on onerous contract conditions.
Allegiant IRS identified an opportunity to engage the legal expertise of McCullough Robertson to help structure a contract negotiation framework (known as Contracting Pillars), which provides guidance in achieving a proportionate risk allocation when negotiating contracts. Our key objectives through this engagement were to:
By achieving this alignment of risk and transfer, Allegiant was able to provide the client with significant peace of mind that their contracting principles, if followed, protected their business and allowed them to contract with confidence. Additionally, by being able to ‘sell’ a well managed and robust risk profile to insurers, Allegiant was able to:
The seamlessness of the Allegiant / McCullough process was brilliant. The peace of mind knowing that if a contract goes pear-shaped, we know exactly what the cost to our business will be – worst case.