Here’s what you need to know about the new AIA A201 contract language and insurance requirements

Kenneth W. Cobleigh, managing director and counsel of AIA Contract Documents, writing for Construction Executive, highlighted some of the major impacts that the 2017 revision to the fairly ubiquitous A201 contract language might have on projects:

The single most significant 2017 revision to the A201 Family is the creation of an Insurance and Bonds Exhibit to accompany the key owner-contractor agreements.

To create a more expansive and flexible set of insurance requirements, the new Insurance and Bonds Exhibit distinguishes between required coverages and optional coverages. Required coverages for the contractor include commercial general liability coverage, auto liability coverage, workers’ compensation and employer’s liability coverage, and other coverages based on the type of project. Optional insurance coverages include railroad protective liability insurance; asbestos abatement liability insurance; and insurance for physical damage to property while in storage or transit.

While the Insurance and Bonds Exhibit requires the owner to purchase builder’s “all-risks” insurance sufficient to cover the total value of the entire project, the contractor may optionally provide this coverage. The builder’s risk coverage is required to be maintained until substantial completion of the work.

Here are some additional changes worth noting:

  • Article 11 removes a requirement for the contractor’s insurer to notify the owner of pending lapses in coverage. Instead, owner and contractor owe each other an obligation to provide notice of upcoming lapses or cancellations of insurance policies.
  • A201’s insurance exhibit provides flexibility for parties to customize language pertaining to coverage requirements, and “…also prompts the parties to consider additional insurance coverages that might be warranted, depending on the nature of the project and particular risks that might be encountered.”
  • Building Information Modeling (BIM) features prominently in the new contract template, with an explicit reference to the AIA E203 which sets forth protocols for the model and other digital files.
  • A curious provision regarding BIM states “…that any use of all or a portion of information contained in a BIM model, without establishing and set forth the necessary protocols, is at the using or relying party’s own risk and without liability to any other project participant.”
  • As in previous versions of the AIA Contract Documents, construction means, methods, techniques, sequences and procedures are the sole responsibility of the contractor.
  • Additionally, § 4.2.2 still states that the purpose of an architect visiting the site is to “observe,” and the architect is not “…required to make exhaustive or continuous on-site inspections to check the quality or quantity of the Work.”

What Else Do You Need To Know?

The AIA A201 Standard Form of Agreement Between Owner and Contractor is such a critical document in the built environment, it is worth taking the time to stay abreast of the major changes reflected in the current version. To that end, the AIA is hosting a free webinar on May 11, from 2 to 3 EDT. AIA members attending the session will also earn HSW continuing education credits.

If you would like to compare and contrast the differences between the 2007 version and the new 2017 version, here is a handy PDF prepared by the AIA tracking the changes between the two.


Image courtesy AIA Contracts