The Demolition of 109 E. Main Street: Part III

As part of the demolition contract, Mayor Santiago signed an insurance indemnification agreement with Perryman Excavating, Inc. So what does this mean? If anyone brings an insurance claim against Perryman Excavating, Inc. related to the demolition, the city will be held responsible and not Perryman Excavating, Inc. The city would have to defend any claims and pay any claims. 

Now the city has insurance through the Joint Insurance Fund. According to the Joint Insurance Fund guidelines, the city should do the opposite of signing this indemnification agreement. The city should have a Hold Harmless Agreement. With a Hold Harmless Agreement the city would not have to defend any claims or pay any claims resulting from this demolition, the contractors would. Both Perryman Excavating, Inc. and Pennoni Engineering did not sign Hold Harmless Agreements. The Joint Insurance Fund also has guidelines for the amount of insurance that a contractor performing work for the city should have. According to the guidelines for this type of project, the amount of insurance should be $3,000,000. Both Perryman Excavating, Inc. and Pennoni Engineering  only have $1,000,000 in insurance coverage.

So why does all this matter? If the city does not follow the Joint Insurance Fund guidelines, the insurance company does not have to cover any claims that arise. That means the city would have to pay the claim in full. Secondly, the city's insurance costs are based on the claims against the city. By the Commissioners allowing the indemnification agreement, the citizens may now face possible insurance bill increases. 

Team Santiago's job is to look out for the citizens of the City of Millville. Once again Santiago, Parent, Udalovas, Pepitone and Cooper have put the city of Millville in financial jeopardy.

Comments

Rich Sampson said…
Great explanation on this issue. Thanks!
May 20, 2018 at 4:37 PM
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