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Council presses McKenna contract over indemnity language; staff told to return with split clauses
Summary
Council and the city attorney debated indemnity and insurance language in a proposed building services contract with McKenna; council directed staff to draft two indemnity clauses and return after carrier review.
City officials and a McKenna representative discussed changes to a proposed contract for building department services at Fraser’s March 13 meeting, focusing on indemnity and insurance language.
City Attorney (unnamed) told council he proposed broad contract language to protect the city from potential third‑party claims and to avoid city deductible exposure. "My level is generally to try to protect the city from anything and everything I can think of, and in every way possible," he said.
McKenna's representative said the firm carries nationally available professional errors‑and‑omissions coverage and general liability insurance, but their carrier had reservations about some defense/indemnity wording. "We have the most comprehensive, professional errors and omissions insurance that's available nationally," the McKenna representative said, adding that McKenna has operated under an arrangement without indemnification for the six years they’ve provided services to the city.
Council members raised concerns about shifting risk to the city and the potential for claims to affect the city’s insurance deductibles or premiums. Council member O'Dell noted the city had requested similar indemnity terms from another provider, Roseville, and was told Roseville had agreed to that clause in a previous proposal. Council member Baranski said industry practice typically places responsibility for vendor‑created risk on the vendor and their insurer.
After discussion, McKenna agreed it was willing to review alternative language. Council directed staff and McKenna to pursue two separate indemnification clauses—one addressing professional errors and omissions and one addressing general liability—have carriers review them, and return with an analysis of remaining city risk and potential costs. The manager said staff will prepare the clauses and an analysis for council consideration; no final contract vote was taken at the meeting.
The council did not adopt the contract at the meeting; next steps are staff negotiation and written return to council for decision.
