Construction Insurance Bulletin

When an accident occurs on the job, if the very first call being made isn’t to 911, it had better be to the on-site medical staff. There are facilities where a sort of “chain-of-command” procedure is in place for responding to emergencies: The first call is made to the foreman, and then the foreman calls the security guard, and then the security guard calls his boss, and then the boss calls the client, and then once the client gives the greenlight, the security boss calls the nurse, and then… it can be ludicrous how many steps need to be taken before an ambulance can be dispatched to the jobsite.

– Everyone should know their job, who it is they’re supposed to call to update them on what’s happened.

– First-responders need to be the first people contacted.

– You need to coordinate as you go. If you’ve called 911, send the message down the line that 911 has been called. Keep everyone on the same page.

– The fewer middlemen the better. Don’t turn it into a literal game of Telephone.

Not everything you need to know is going to be in the manual. There are a lot of little things that we can do to create a safer workplace that you’re not going to see in every manual and training video.

– Retire your damaged and worn-out tools. You may have an old hammer that you’ve used on every job for fifteen years, you love that hammer and you don’t want to put it to rest, but… when the head flies off and lands where it wants to land, you’ll wish you’d invested in a new one.

– Give people space to work. You don’t need everyone pushing and shoving past each other while carrying power tools. Make sure to space out workstations.

– Keep tools away from heat sources. Leave a pair of pliers on top of a generator and you’re just asking to get burns and blisters when you pick it up next.

– Try to reduce noise and vibration. You’re going to make noise on a jobsite, but power tools with muffled noises and lower vibration will do less damage to the ears and joints.

– Don’t go carrying or yanking any tool by its cord or hose. It’s easy to hand a drill to someone by dangling it off the scaffolding instead of walking down and handing it to them, but it could lead to frayed wires and, eventually, a nasty shock. At the very least, you’re putting undue stress on the tools.

– Maintain good posture. Standing up straight at a workstation means you’re going to be less likely to slip or stumble or drop something on your toes.

– Don’t push the overtime. There’s a reason the workday lasts about eight hours: it’s very hard to be aware and alert after ten, twelve hours of work. Make sure that you’re not pushing your team too hard. Hire a few extra crew members if need be. It will cost you less in the long run than an on-site injury will.

– Don’t skimp on the guardrails. Maybe that platform is only going to be up for two days while you finish up the second floor wiring, but why skimp on the extra hour it would take to give it some guardrails?

– Walk, don’t reach. If something isn’t close enough to grab it, take a step closer, don’t lean to it, especially not on any elevated floor.

– Put the tool back in your belt, not down on a surface. You don’t need to drop your wrench on someone’s head, you don’t need to have someone trip on your hammer, and of course, you don’t want to forget where you put your tools.

Hurricane Sandy, tornadoes, flood — all of these disasters affected construction firms during the past year. Some companies took direct hits, while others suffered from massive service demands, and shortages of help and supplies.

Although your business might never face such massive “destruction and distress,” other events –everything from IT failure to vandalism — could trigger a crisis.

Whether it’s a catastrophe or a stressful disruption, the best way to prepare for any potential disaster is to develop a catastrophe plan in advance. This plan should allow your staff to mobilize the right resources quickly in the right order so you can get up and running with as many contingencies as possible accounted for in advance.

How do you go about developing a plan? What’s the process? Who should you include? How often should you review and update it? An effective plan should involve a “business resumption team” with managers from these areas:

• Information Technology
• Communications – Internal/External
• Moves and Relocation
• Services and Logistics
• Salvage and Security
• Customer Service

Before a crisis erupts, the team will determine what activities to follow, assign responsibilities for these tasks, and provide the resources and information needed. When compiled and organized, these activities, responsibilities, resources, and information make up the disaster plan.

Don’t wait for a crisis to uncover the gaps in your preparations. Get started now on creating and/or updating your plan.

Feel free to give us a call so we can offer our advice and recommendations. Insurance might not solve all your crisis planning problems, but it can provide a solid foundation.

Because construction projects are complex operations involving a number of subcontractors under your supervision, onsite accidents or injuries resulting from their work can easily lead to litigation against you. To protect yourself against claims, losses, and expenses if disputes arise during the project, make sure that all subcontractors sign a “Hold Harmless Agreement” clause.

The terms of these clauses will vary from state to state. In some cases, this clause will protect the contractor from claims by corporations or companies that did not sign the agreement.

There are three types of hold harmless agreements:

1. Under the Broad Form, the subcontractor assumes all liability for accidents due to negligence of the general contractor, and combined negligence between the two parties. Because of its sweeping terms, this form is relatively rare – and some states prohibit it.
2. With the Intermediate Form the subcontractor takes on all liability for accidents and negligence, but will not be held accountable for the general contractor’s actions. It doesn’t matter whether the incident was the subcontractor’s fault. If both parties were negligent, the subcontractor assumes liability all for its acts or omissions. Intermediate form agreements are relatively common.
3. A Limited Form agreement makes the subcontractor liable only for the proportional part of its responsibility for a mishap. Other parties – such as subcontractors – will be held liable under their hold harmless agreement(s) for their corresponding part of the accident or negligence.

The type of agreement that’s best suited for your needs will vary depending on the nature of the project and state laws. As always, we stand ready to offer you our professional advice.

Layoffs during the recession have resulted in a shortage of qualified workers in specialized areas of construction – and the problem will probably get worse as the industry picks up during the recovery. In this environment, some contractors might be tempted to stretch their hiring standards to fill out a project roster, increasing the danger of losses from on-site injuries and defect claims, among other risks.

The past two years have seen a sharp drop in the unemployment rate for former construction workers, but not a corresponding increase in construction industry growth. This means that these workers who have been unemployed are often finding other types of work, becoming full-time students, or have given up looking for a job in the building trades industry.

Because each construction company works in a unique environment and culture, a worker from one firm going to another might not have the required expertise. What’s more, construction is a profession that takes time to learn. Tight profit margins and financial problems can pressure smaller and midsize contractors into cutting corners by hiring inexperienced workers. This increases the risk of on-site accidents and injuries –and leads to poorer quality work that can easily result in costly and annoying defective construction claims (see the article “Construction Managers E&O Insurance: Nobody’s Perfect! ”

In addition as the building industry comes out of the recession, OSHA has become far more aggressive and vigilant in monitoring worker safety.

The bottom line: Avoid the temptation of hiring inexperienced workers as a way to save money, and you’ll keep your risk of on-site accidents and injuries – not to mention your insurance premiums – under control. What’s not to like?

Most construction projects include the use of scaffolding, which can leave your workers vulnerable to injury. To help you prevent falls on site, industry expert recommend that managers follow these proactive guidelines:

Complying with comprehensive legal and regulatory codes plays an essential role in constructing safe, energy-efficient, and “sustainable” buildings – and helps drive up the cost of Construction Insurance.

The International Code Council, a think tank of building officials and engineers, keeps writing increasingly complex building codes that cover every aspect of residential and commercial construction from foundation to roofs. Consider this: the ICC manuals doubled in thickness from 2003 to 2009. By adopting new ICC standards, local and state governments seek to limit their liability and protect their communities more effectively. The National Fire Protection Association and the International Fire Code Council have developed and adopted stronger building codes to protect building occupants and firefighters.

Continuing revisions and updates to building access standards under the Americans with Disabilities Act require extensive and costly improvements.

What was once seen as a moral obligation to sustainable building practices is becoming mandatory. You might have heard the terms Platinum, Gold, Silver, and Bronze, which distinguish the “greenness” of a building. More and more municipalities are requiring new buildings to meet the rigorous LEED design, construction, operations, and maintenance standards developed by the U.S. Green Building Council.

Compliance with all of these legal and regulatory requirements is boosting construction costs and lengthening timetables throughout the nation. At the same time, failure to comply with building codes has triggered a significant increase in the number and size of insurance claims – which keeps driving up premiums – and pressures contractors to recover their costs by raising prices.

To help you keep up with the potpourri of building codes, keep your Construction insurance program protecting you and keep your premiums under control, feel free to consult the professionals at our agency. We’re here to serve!

A “coverage trigger” is an event that causes your Liability policy to pay a claim. There are two basic types of “triggers”: occurrence and claims made.

An “occurrence” trigger means that the policy will cover any injury or damage during the policy period. For example, if a roof that you installed four years ago collapsed last week, injuring five people, the occurrence trigger will apply and the policy will pay. It doesn’t matter when the roof was built or when the claim was filed – only when the actual injury took place.

A “claims-made” trigger, as the name suggests, focuses on the date the actual claim is made. Underwriting and rating provisions might limit how far into your past the policy provides coverage. However, the key question is: “did the claim come in during the policy period?” If so, a “claims-made” Liability policy will pay. Using the example of the collapsing roof, it doesn’t matter when the roof was built or when the event took place, the trigger won’t apply until the claim is filed.

If this claim is made during the current policy period, your insurance company will pay it. However, suppose the claim isn’t made for several weeks; and by the time it arrives, your current coverage has expired and you’re into a new policy period? In this case, the “claims-made” policy will pay the claim, since it was made during the new period.

One type of trigger isn’t necessarily better than the other. However, it’s almost always wise to keep the current type in order to provide relatively seamless coverage.

If you’re offered a Liability policy that offers broader coverage or more attractive pricing – but has a different trigger than your current insurance – consult with us before you make a decision. The only way to be sure you get the protection you need at a fair price is to consider all possible underwriting considerations and how the change in trigger might affect your liability needs.