Contractors Risk Everything Without a Left Tackle
Posted by Robert Phelan on Thu, Dec 03, 2009 @ 09:40 AM
In an earlier post I talked about Lawrence Taylor's impact on football strategy. LT's aggressive attacks on the quarterback dramatically increased the importance of the Left Tackle position. Since the quarterback is the most valuable asset on the team, the Left Tackle became equally valuable as the position protecting the QB's blind side.
Contractors have literally hundreds of blind sides. Over the course of the next few months I'll be detailing them here. I want to start today with what I think is one of the most important yet overlooked blind sides to most contractors. Contractors are called contractors for a reason. They sign contracts to build things. Risk is transferred in those contracts and that's when it can get ugly.
One of my goals in this blog is to simplify some of the concepts related to risk so that contractors are more conscious of them. Here's a formula I want you to memorize:
RT = LT
Translated, that means Effective Risk Transfer = Your Most Important Left Tackle
When you sign a contract, you have upstream obligations and most of you hire some subs and create downstream obligations. The complexity of contracts today and their insurance requirements turn this into a minefield. Once risk starts to get transferred, it's anybody's guess who will get left holding the bag in this high risk game of musical chairs.
When it comes to contracts, an experience and well-trained Risk Advisor is the Left Tackle you need to have on your team. You need a specialist who is reading construction contracts every day. Someone who understands the legal as well as insurance aspects of construction agreements. Over the next several posts I will discuss a process that your company needs to follow on every contract.