Accidents Happen

construction liability insuranceNo matter how much care you take to keep job sites safe and finish projects according to specifications, accidents happen. Sometimes all it takes is one unfortunate situation for your world to come crashing down (check out this suit involving Eddie Van Halen). In many cases, construction liability insurance could be the key to holding it all together. Consider these scenarios:

  • an improperly installed kitchen cabinet shelf in a home you built collapses, injuring the owner
  • one of your employees posts a blog accusing a competitor of shoddy workmanship
  • a visitor to your worksite trips over an air hose, falls, and fractures her leg

To protect your business against the financial threat of costly litigation from such all-too-common mishaps, you need construction liability insurance.

This coverage will pay costs and legal expenses (up to the amount of the policy) for something your business did — or failed to do — that damages a third party, related to

1) your products or services (products and completed operations)

2) allegations of slander (personal and advertising injury) OR

3) injury on your premises or job site (medical expenses)

As a common business practice, both residential and commercial clients will require you, and your subcontractors, to show evidence of construction liability insurance before starting a job.

In general, residential contractors should buy coverage two to three times the amount of the construction budget. Commercial contractors usually carry policies in the multi-million dollar range. Firms that face higher risk of damages (for example, roofing contractors or those in specialized trades) tend to have more coverage. Some contractors prefer to pay their premiums up front, while others make a down payment and finance the premium over the policy period (six months to a year).

No matter how large or small your business, having comprehensive construction liability insurance is always the best policy.

We’d be happy to review your situation and recommend the coverage that’s best suited for you.

The Ten Commandments

hestonNow that you’re picturing Charlton Heston, I’ll tell you we’re not talking about THOSE ten commandments, but these are important as well. Instead we’d like to draw your attention to ten principles of leadership that will help you and your employees to focus on job safety.

  1. Don’t walk by. It is everyone’s responsibility to prevent any potentially unsafe acts and conditions they witness from turning into accidents.
  2. STOP! Encourage employees to stop working whenever they feel unsafe, no matter what reason they give.
  3. Focus on a safe working environment. If you expect your workers to work safely, make their workplace as safe as possible.
  4. Don’t blame the worker first. Unsafe ways of working, accidents, incidents, and ill health aren’t necessarily the worker’s fault. The problem often comes from less obvious causes, such as decisions by management.
  5. Use your workforce for ideas. Employees often have a more accurate idea than you or your managers about which safety and health practices will work, because they deal with these issues every day.
  6. Be patient. Don’t expect quick wins. Improvements in job safety will emerge over time, but only if you stick with them.
  7. Explain your decisions. Just telling workers that something is wrong or a safety risk isn’t enough. If they’re to act on the information you provide, they need to know why and how to avoid harm.
  8. Lead by example. Your behavior sends powerful signals. If you carry out your job in a safe way, your workers are more likely to do the same. If you don’t, they won’t imitate you.
  9. Focus on co-operation. Treat your subcontractors in the same way as employees by encouraging them to communicate with each other.
  10. Don’t neglect occupational health. If you look after the health, as well as the safety, of your workers today, you’re less likely to create problems for them or your business tomorrow.

Sound advice! If you follow these commandments carefully, you will see job safety improve over time. By nature, most organizations resist change. Successful business owners will learn how to take these ten commandments and integrate them into the culture of their company. They will help their construction supervisors to go from simply managing, to leading.

At Mason & Mason, we’re pleased to be part of your team. Managing risk is our business – thank you for trusting us with yours.

Green Building is Great – But how will your insurance apply?

green handsEnvironmentally-friendly construction (also known as green building) is increasing rapidly in the United States. Concerns about global climate change, U.S. dependence on foreign sources of energy, and rising energy costs are inspiring individuals and businesses to construct buildings with a reduced carbon footprint. This trend has important implications for settlement of insurance claims when green buildings suffer damage.

A green building is one that has met the requirements for Leadership in Energy and Environmental Design (LEED) certification. The U.S. Green Building Council developed LEED in 1998 as a way to help building owners identify and use practical and measurable designs, construction, operations and maintenance practices that are environmentally-friendly. Green buildings are, compared to standard buildings, more energy and water efficient, produce less carbon dioxide, and have a healthier indoor environment.

Some states and municipalities have begun to adopt building codes that require elements of green construction. California has imposed tougher water efficiency standards on new residential construction; New York City is considering more stringent energy-use standards for large buildings.

The impact of these requirements on construction costs will vary by location. Green construction might require specialized materials and methods. In the near term, contractors with expertise in these methods may be relatively scarce. That means that in some places the cost of complying with green building codes could be higher than building with standard materials and methods, and that will impact insurance coverage.

The factors that will influence the claim include:

  • Whether the green building code applies to new construction only or also to major renovations.
  • What the code defines as a “major renovation.” Some codes might consider renovations affecting more than a specified percentage of the building’s area as a major renovation.
  • How will use of green building materials affect the building’s appearance? The property owner might lose enthusiasm for a repair if a change in appearance will lower the building’s market value.
  • How will the new materials interact with the existing building components? Will integrating the new materials increase rebuilding time and cost?
  • Are qualified contractors available in the area?
  • Will wait times for green contractors and materials result in costly project delays?
  • How does the building code apply in the event of a large natural catastrophe, such as an earthquake or hurricane? Must property owners meet the higher standards at a time when hundreds of properties have suffered damage?
  • After a catastrophe, will there be long wait times for contractors to haul away debris because of overwhelmed landfills and recycling centers? Will there be long wait times for building inspectors to visit and approve all of the effected properties?

Standard personal and commercial property insurance policies provide very limited amounts of coverage for “ordinance or law” losses — extra costs incurred to meet local building requirements — but additional coverage is available. Property owners in areas with green building codes should speak with our insurance agents about options and costs.

Research and publishing company McGraw-Hill Construction has predicted that the market for non-residential building retrofitting with green building will grow to $15 billion by 2014. Property owners and insurance companies will have to address these questions much more often in the near future. The time to answer them is before the losses occur.

New Technologies Help Contractors Manage Risk

More and more construction contractors are using new technologies in the form of mobile and Web-based software solutions to qualify subcontractors, keep workers safe, and manage their vehicles and equipment.

For example, Weitz Co. (Des Moines, IA) uses a centralized electronic project bid and prequalification submission database for its subcontractors that has significantly reduced the labor and time needed to process submissions. Says Vice President of Risk Management Maria Matamoros, “We’re already seeing enhanced consistency in our pre-qualifications, and it’s helping us generate a high-quality subcontractor pool.”

Hoar Construction (Birmingham, AL) has a Web-based portal through which managers use their company-issued iPads to file state and federal inspection site inspection forms and access subcontractor evaluation reports, as well as a digital library of safety manuals and tutorials, “More importantly, it has allowed us to keep our superintendents and our project managers in the field,” according to Hoar Corporate Safety Director Bart Wilder, “which gives them more time to evaluate and find ways of mitigating risk.”

Goodfellow Brothers Inc. (Kihei, HI) upgraded its fleet with wireless handheld transmitters that operators use to submit daily inspection reports on their vehicles. During the two years since the upgrade, the company slashed its Auto Liability losses by more than 70%.

new technologiesHowever, contractors need to make sure that new risk management technologies are compatible with their operations and workforce. “One size certainly does not fit all,” warns the Weitz Co.’s Matamoros. Goodfellow President Chad Goodfellow describes the new system as “a challenge for some of our people and for our management, because we want to demonstrate that we do trust our employees, but at the same time, we have to trust and verify.”

New technologies can certainly improve efficiency, and even safety, but they must be adapted to the needs of your crew and implemented carefully. Are you using new technologies? Let us know! We’re interested to see how our clients are putting technology to work for their companies.

Worker Safety Essentials

worker safetyA resurgent construction industry needs to improve worker safety. That’s the bottom line of a recent report by Marsh Risk Consulting.

Based on data from the U.S. Bureau of Labor Statistics, the study, “Building Safety and Leadership in the Construction Industry,” notes that the industry’s 2012 fatality rate increased to 9.5 per 100,000 workers from 9.1 per 100,000 in 2011. The 775 construction-sector deaths in 2012 marks the first annual increase in work-related fatalities since 2006.

According to Marsh, fatalities will probably continue to rise without concerted industry-wide safety improvements, as an ongoing shortage of experienced construction workers leads to widespread promotion of unskilled workers into supervisory roles. “The increase in new construction activity is bringing an influx of new, inexperienced workers,” states the report. “In this environment, some contractors are stretching their hiring standards to meet project demands.”

Marsh recommends that construction firms focus on training management to ensure effective leadership and help build a culture of worker safety throughout their organizations.

“As the economy grows and the number of new construction projects picks up, now is not the time to be lax on safety,” warns John Moore, a construction safety specialist in Marsh’s workforce strategies practice. “Inadequate safety performance can lead to employee turnover and legal, financial and reputational risks. Investing in high-quality leadership will go a long way toward retaining valued workers and maintaining a safe work environment.”

The more you do to keep your workers, safe, the better for all concerned– and the lower your insurance costs. We stand ready to offer our advice on developing, implementing, and enforcing worker safety standards. Just give us a call.

Cold Weather Checklist – Be Prepared

cold weatherCold weather will be with us for a few months which can cause a variety of problems for contractors and their employees who work outdoors in winter weather.

To help your workers stay warm and safe on the job, follow these precautions:

  • Make sure that they keep their body temperature at or about normal by wearing layers of clothing, both inside and outdoors.
  • Provide proper rain gear, gloves, good waterproof boots, and an extra pair of clean, dry socks.
  • Have workers protect their neck and ears; they can lose a lot of heat from these areas.
  • Treat frostbite properly. According to the Mayo Clinic, the most telling symptom is a numbing effect, which many workers tend to ignore. Other symptoms can include red skin turning to white, poor blood circulation, and blisters. To provide first aid: 1) never rub the frozen part in snow or immerse it in hot water (you can use warm water); 2) cover the affected area with extra clothing or a blanket; 3) get the worker out of the cold; 4) apply loose fitting, sterile dressings and splint and elevate affected extremities if possible; and 5) seek immediate medical attention.
  • Make sure that portable heaters are maintained and inspected on a regular basis. Defective ventilation and incomplete burning of fuel can lead to carbon monoxide poisoning. Locate fuel containers, regulators, piping, and hoses and secure them in sites where they won’t be subject to damage. Protect the valves from damage also.

Remember, the more effectively you help your employees stay warm and safe on the job, the higher their productivity – and the lower your insurance premiums. Cold weather doesn’t have to slow you down.

For more information, please feel free to get in touch with our agency’s Construction insurance specialists at any time.

Clauses. No, not Santa. Hold Harmless.

hold harmlessBecause 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:

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.

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 for all of its acts or omissions. Intermediate form agreements are relatively common.

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. Looking for more information? Click here to request our sample contract. As always, we stand ready to offer you our professional advice.

OSHA Launches Campaign to Curb Construction Falls

According to the Occupational Safety and Health Administration (OSHA), falls are the leading cause of construction deaths. In 2010, fatalities from falls accounted for 264 out of 774 deaths in the construction industry.

To curb such deaths and injuries, OSHA has joined forces with the National Institute for Occupational Safety and Health and National Occupational Research Agenda (NORA). The Construction Nationwide Safety Awareness Campaign is comprehensive and based on three key steps for employers:

OSHAPlan for Safety. To ensure safety on job sites that involve working from heights, plan how the project will be done and the tools needed. When estimating job costs, include these resources and have them available on site. For example, on a roofing job, think about such potential fall hazards – holes, sky-light, leading edges, etc. – and then select appropriate fall protection equipment, such as personal fall arrest systems (PFAS).

Provide Proper Equipment. Provide workers who are six feet or more above lower levels with fall protection and the necessary equipment including ladders, scaffolds, and safety gear. If roof work is involved, have a PFAS with a harness for each worker who needs to tie off to the anchor. Make sure the device fits and inspect all equipment regularly.

Train Workers. Finally, give workers “toolbox talk” training on potential fall hazards and the set-up and use of the safety equipment they’ll be using. The OSHA campaign has a number of training tools, job site posters, and other educational resources – (many of which target workers with limited English proficiency).

To learn more about how to keep your workers from falling down (literally) on the job, feel free to get in touch with our construction insurance specialists.

Beware of Negligent Supervision Claims

negligent supervisionAs kids, we learn that there are two ways to get in trouble: doing stuff we shouldn’t (giving the dog a haircut) or not doing things we should (letting Fido go hungry).

As a contractor, you can get into serious trouble for not doing something – under a legal doctrine called “negligent supervision.” For example, if one of your employees injures another person by driving a car recklessly while on company business, you might face a negligent supervision lawsuit alleging that you failed to uncover or ignored the driver’s bad record behind the wheel.

To minimize this risk, experts recommend that you:

Understand your exposure to potential negligence. Although it’s an exaggeration to say that anything you do (or don’t do) might be seen as negligent, certain situations demand particular care. Promoting or certifying unqualified employees, failing to fire or discipline them for potentially dangerous behavior, or terminating them without an effective investigation.

Never make assumptions about employees. Just because workers volunteer for additional responsibilities for which they might be unqualified (out of boredom, a wish to please, or to earn a higher wage) doesn’t mean they can actually do the work. Check the employees petitions before assigning the work.

Don’t ignore or minimize signs that employees pose a potential danger to themselves or others. After the tragic shootings at the Washington Navy Yard, the media was filled with evidence of the shooter’s troubling behavior that the authorities evidently ignored. If you’re concerned about an employee’s actions, investigate, inquire, and consult with experts, including the police. It’s better to be safe than sorry!

Looking for more information on avoiding negligent supervision lawsuits? Here are 4 Tips.

We’d be happy to review your exposure to negligent supervision claims and how liability insurance can protect you against these allegations. Just give us a call.

Pollution Liability: The CPL Solution

Air, water, and soil pollution pose a serious financial threat for contractors. One small misstep regarding pollution liability can require thousands – or even millions – to clean up.

Consider these scenarios:

  • Remodeling a school kicks up dust
  • Using construction materials generates fumes that pollute the air
  • Hitting an underground storage tank leads to the release of liquid pollutants
  • Spraying to remove a bees’ nest from a work area releases insecticides
  • Tying into a sewer line improperly causes sewage to back up

Your Comprehensive General Liability (CGL) policy provides severely limited protection against these types of pollution liability claims. Not to worry! Contractors Pollution Liability (CPL) insurance can protect you.

pollution liabilityCPL covers Bodily Injury and Property Damage – whether by settlement or verdict – as well as the expenses of investigating, defending, or settling claims. Most policies also cover the costs of removing or neutralizing pollutants and restoring the damaged property.

CPL policies usually include a “hammer clause” that works like this: if the contractor chooses to fight a claim, rather than settle it, the insurance company’s liability for damages and claims expenses is limited to what it would have had to pay if the contractor had approved the settlement. As you can imagine, most contractors choose to settle when their insurer recommends this approach.

As with Contractors Professional Liability coverage, CPL policies are usually written on a case-by-case basis, with the size of the policy depending on your situation (for example coverage might be worldwide or limited to the U.S). Our agency would be happy to work with you, and the quality insurance companies we represent, to tailor a program suited for your needs. Feel free to get in touch with us at any time.