Whether you are an owner, general contractor, subcontractor, or supplier, your relationship to the project will almost certainly be governed by a contract. While provisions governing payment and scope of work are essential, risk-shifting provisions that allocate certain risks and liabilities among parties play a critical role in protecting you in the event of disputes that, with enough projects, are inevitable. This article outlines some of the most common risk shifting provisions and why you should consider including them in your construction contracts.

1. Indemnity
An indemnification provision is a contractual provision under which one party (the indemnitor) agrees to assume liability for the losses incurred by another party (the indemnitee). Most commonly, the indemnitor agrees to defend, reimburse, and hold the indemnitee harmless from certain specified liabilities, often those arising from the indemnitor's work or negligence. For example, a general contractor might require that its subcontractors indemnify the general contractor for any claim made against the general contractor that arises from wrongdoing relating to that subcontractor’s scope of work. However, parties should consult with an attorney to make sure that their indemnity language complies with applicable state laws. Most state statutes have provisions that set forth certain requirements for an indemnification provision to be enforceable and upheld in court.