A Contractor’s Liability for Injuries to a Subcontractor’s Employee A Contractor’s Liability for Injuries to a Subcontractor’s Employee

A Contractor’s Liability for Injuries to a Subcontractor’s Employee

Employees of subcontractors injured on the job often file lawsuits against the general contractor or construction manager because, unlike claims against their employer, such claims are not subject to the limits of recovery set forth in the worker’s compensation act. Whether a general contractor or construction manager can be held liable for on-the-job injuries sustained by the employee of a subcontractor turns on whether a duty is owed to the employee or not. This question often hinges on subtle differences in contract language.
 
In a recent case, the Indiana Court of Appeals determined a general contractor did not owe a duty to the employee of a subcontractor despite the fact the general contractor appointed a safety representative and was responsible for implementing and monitoring a safety program. But in an earlier case the Indiana Court of Appeals held the general contractor did owe a duty because the contract stated it would take precautions to prevent injuries. These cases provide important guidance when reviewing safety provisions in your next contract.
 
General Contractor Potentially Liable – Stumpf v. Hagerman Const. Corp.
 
In Stumpf, an employee of a sub-subcontractor was injured while installing pipe insulation. 863 N.E.2d 871 (Ind.Ct.App. 2007). The outcome of the case hinged on whether the general contractor owed a duty to the employee. The Court recognized that generally under Indiana law a contractor does not have a duty to supervise the work of a subcontractor to assure a safe workplace and, as a result, is not liable for the negligence of the subcontractor. However, the Court noted that a general contractor can owe such a duty in five situations: (1) where the contract requires the performance of intrinsically dangerous work; (2) one party is by law or contract charged with performing the specific duty; (3) where the performance of the contracted act will create a nuisance; (4) where the act to be performed will probably cause injury to others unless due precaution is taken; and (5) where the act to be performed is illegal.
 
The contract between the general contractor and owner in Stumpf stated:
 
The Contractor shall take all necessary precautions for the safety of employees on the work, and shall comply with all applicable provisions of Federal, State, and Municipal safety laws and building codes to prevent accidents or injury to persons on, about or adjacent to the premises where the work is being performed.... Contractor shall designate a responsible member of its organization on the work, whose duty shall be the prevention of accidents.
 
The Court determined this language demonstrated an intent for the general contractor to assume a duty of care for all persons working on the jobsite, and therefore under the law the general contractor was charged with such a duty. As a result, the Court held it was for a jury to decide whether the general contractor breached this duty.
 
Another case holding the general contractor could be liable for injuries to a subcontractor’s employee is Capitol Const. Serv., Inc. v. Gray, where the contract specified that the general contractor was responsible for the acts of its subcontractors and would provide fall protection systems for the project. 959 N.E.2d 294 (Ind.Ct.App. 2011). Similarly, in Harris v. Kettelhut Construction, Inc., the Court decided the general contractor could be held liable because the contract stated it would take “necessary precautions for the safety of all employees on the Project,” which the Court found necessarily included all employees of subcontractors. 468 N.E.2d 1069, 1072-73 (Ind.Ct.App. 1984).
 
General Contractor Not Liable - Ryan v. Architects/Engineers/Contractors, Inc.
 
In Ryan, an employee of a sub-subcontractor was injured on a job and sued the general contractor. 55 N.E.3d 340 (Ind.Ct.App. 2016). The contract between owner and general contractor was written on the Design-Build Institute of America’s standard form. It stated:
 
  • The general contractor “recognizes the importance of performing the Work in a safe manner so as to prevent damage, injury or loss to … all individuals at the site, whether working or visiting.”
  • The general contractor assumes “all responsibility for implementing and monitoring all safety precautions and programs related to the performance of the Work.”
  • The general contractor will “designate a safety Representative with the necessary qualifications and experience to supervise the implementation and monitoring of all safety precautions and programs related to the Work.”
  • The general contractor’s responsibility for safety does not relieve subcontractors of their contractual safety obligations.
 
Noting that a general contractor can accept a duty to the subcontractor’s employee through contract, the Court determined that was not the case here. The Court emphasized that the contract did not require the general contractor to “take precautions” as the contract did in Stumpf. Instead, the general contractor merely “recognized the importance” of safety. Additional, the safety representative appointed by the general contractor only supervised the safety precautions; the contract indicated the implementation and monitoring of the safety program would be handled by someone else.
 
A similar result was reached in Hunt Construction Group, Inc. v. Garrett, where the construction manager was obligated to review and monitor contractors’ safety programs but the contract explicitly stated the construction manager was not “assuming the safety obligations and responsibilities of the individual Contractors.” 964 N.E.2d 222 (Ind. 2012). In addition, in Shawnee Const. & Eng’g, Inc. v. Stanley, the general contractor was absolved from liability because the general contractor had no duty to inspect the work, and the subcontract agreement stated the subcontractor assumed all responsibility for injuries to its employees. 962 N.E.2d 76 (Ind.Ct.App. 2011).
 
Conclusion
 
Contract language regarding responsibility for safety precautions should be closely scrutinized. Slight differences can make the difference regarding whether the general contractor has a duty to the employees of subcontractors with respect to injuries on the jobsite or not. In addition, indemnity provisions which could re-direct liability to a subcontractor for injuries incurred by the subcontractor’s employees should be included in subcontract agreements. Finally, the subcontractor should name the general contractor as an additional insured to give the general contractor another potential source of coverage if it is found to owe a duty to the subcontractor’s employees and is ultimately deemed to have failed to fulfill that duty.
 
Gary Dankert is a Partner and Nate Uhl is a Senior Counsel at Ice Miller LLP. Ice Miller's construction practice (www.icemiller.com/construction/) is ranked as a National Tier 1 Practice in U.S. News & World Reports' Best Law Firms. Dankert and Uhl practice construction law with a focus on assisting clients in preparing and negotiating construction and design contracts as well as handling construction disputes. Dankert can be reached at gary.dankert@icemiller.com or (317) 236-2203, and Uhl can be reached at nate.uhl@icemiller.com or (317) 236-2383.
 
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
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