Temple EasTex, Inc. v. Old Orchard Creek Partners, Ltd.
848 S.W.2d 724 | Texas Court of Appeals, 5th District (Dallas) | 1992
What This Case Means for Subcontractors
A fire damaged an apartment complex under construction in Texas. The owner sued the general contractor and subcontractors for negligence. The court ruled that the AIA construction contract's insurance waiver clause protected the subcontractors from liability for fire damage covered by insurance. The owner's failure to maintain adequate insurance and notify the contractor meant the owner bore the risk of uninsured losses, not the subcontractors. This case shows that proper contract language and insurance requirements can shield subcontractors from major liability claims.
Key Takeaways
- •Use AIA contract forms with clear insurance waiver provisions—they provide strong legal protection against owner claims for insured losses
- •Ensure the owner maintains adequate insurance and receives proper notice of coverage; if they don't, they absorb the risk of uninsured losses, not you
- •Document that you've complied with all insurance requirements in the contract; failure to do so can eliminate your protection
The contractual waiver operates to release Red Gillard and Greener & Sumner from all liability.
Frequently Asked Question
Can an insurance waiver clause in my contract protect me from the owner's fire damage claims?
Yes, if your contract includes a proper insurance waiver clause (like those in AIA forms) and the owner maintains adequate insurance as required. The waiver bars the owner's claims against you for losses covered by insurance. However, if the owner fails to maintain required insurance or doesn't notify you of coverage gaps, they bear the risk of uninsured losses, not you.
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