Archive for Construction
Bridge, Tunnel, and Elevated Highway Construction
Contractors working on bridges, tunnels, and elevated highways work under very dangerous conditions while operating extremely heavy and expensive equipment. These projects are long-term so stability of coverage is vital. Mistakes made at any stage of construction can be deadly and expensive.
Builders risk coverage forms insure buildings and other structures under construction. They are available for a single structure or multiple structures. Premiums can be paid at inception or be based on a deposit premium and periodic reports of value accompanied by premium payments. Coverage is usually for “all risk” perils or causes of loss and may also include earthquake, flood, and broad form collapse. Endorsements are used to broaden, limit, or customize coverage as needed. Deductibles are required. Coverage for design may be purchased separately and includes damage to a building that results directly from an error in its design. It is written as standard builders risk coverage but has an additional charge for design error coverage, which is subject to its own deductible.
Building Equipment Erection and Installation
Contractors that install equipment in buildings may work on a jobsite for as little as a day or for more than a year, depending on the nature of the work and the equipment being installed. While they don’t manufacture the equipment, they install it and must be certain that it is in proper working condition before the job is complete. The installation floater, general liability, and workers compensation exposures are extensive.
The construction industry consists of businesses primarily engaged in constructing and maintaining buildings and other structures. The three major types of construction are: (1) building construction, land subdivision, and land development; (2) heavy construction such as highways, power plants, and pipelines; (3) artisan construction by special trade contractors.
Crane and Rigging Contractors
Crane operators and riggers are high-risk businesses. Huge bodily injury losses that could financially ruin a large operation if uninsured or inadequately insured are possible. Exposures also include damage to property, such as destruction of a building, bridge, or train track and consequential loss of use to utility customers if utility lines are damaged. High liability limits are necessary and commercial liability umbrellas should be used to provide additional limits. Crane and derrick contractors, rigging, and millwright contractors are eligible.
Demolition Contractors Liability
Demolition operations are extremely hazardous, especially in urban settings. The use of explosives and the ever-present danger of building collapse during demolition present significant liability exposures to the general public and to adjacent structures that are not being demolished.
Heavy Construction Contractors
This class applies to commercial contractors not considered artisan contractors and not otherwise classified. Most have significant equipment values and workers compensation exposures, with liability exposures based on the type of work performed.
Highway and Street Construction Contractors
These contractors have serious workers compensation and liability exposures because they are involved with the public. In addition, many use specialized and expensive equipment to perform the necessary work. Insurance on long-term highway projects may be written in wrap-up programs.
Material Handling Contractors
This coverage is designed for contractors that have significant care, custody, and control exposures for property of others, such as crane, derrick, and dragline operators, rigging contractors, and millwrights. Insurance coverage forms and policies are available that provide commercial general liability coverage, including coverage for property of others in the insuredâ€™s care, custody, and control for hoisting and rigging. Additional limits are available through umbrella liability as well as coverage for the insuredâ€™s contractorâ€™s equipment.
Owner Controlled Insurance Plan (OCIP) aka Owner’s Wrap Up
Building project owners may purchase liability and workers compensation insurance for all operations at their specific construction projects, including those performed by the general contractor and all subcontractors. Many states have stringent criteria for approving such programs and they must meet certain contract cost requirements. The use of wrap-ups brings all construction insurance costs and coverages into a single workers compensation policy and a single CGL policy, which can eliminate gaps in coverage and non-concurrency of limits and policy language.
Owners and Contractors Protective Liability (Monoline)
The OCP policy provides liability coverage for a named insured who is sued for injuries related to the actions of a contractor working on his or her behalf. The contractor purchases the coverage but the owner/contractor for whom the contractor works is the named insured. Coverage is limited to bodily injury or property damage that results from operations of a contractor while working for the named insured. Coverage is limited to a specific project or contract and ends when the project is complete or the terms of the contract are fulfilled.
Pumps & Pumpers
Buildings being rehabilitated in order to retain significant older structural features or historical landmarks, to obtain special tax credits, or simply to reduce the costs involved in new construction present unusual builders risk exposures which make them difficult to place. Property values do not begin at zero, as in standard builders risk exposures, because rehabilitation projects already have existing foundations, frames, walls, and roofs. A sublimit usually applies to the value of the building’s shell during the demolition and rehabilitation phases. Establishing partial occupancy before the project is complete can be a concern, especially in commercial rehabilitation jobs as well as in some residential work. Starting with an existing structure requires fire protection, welding and cutting precautions, protective fences, lighting, and guard services that may not be required with new construction.
Site Prep Contractors
Insurance for site preparation contractors can be difficult to place because of liability that arises from their work at building sites to move large amounts of dirt, remove basements, pilings, and concrete piers that previously supported buildings that were demolished. Coverages available include commercial general liability and completed operations liability. Coverage for underground, collapse, and explosion hazards is very important and is usually available for an additional premium charge. All site prep work is inherently dangerous, especially the exposure to workers due to equipment that overturns and cave-ins. As a result, workers compensation coverage is very difficult to place. Contractors’ equipment coverage is also difficult because of the potential for equipment to overturn.
Soil Engineers Professional Liability
This specialty engineering liability exposure is a unique and difficult-to-place architects and engineers professional liability coverage. Engineers who specialize in soil formations and properties work on building projects and analyze the soilâ€™s quality for stability and the ability of the foundations of buildings erected on the site to withstand erosion or deterioration. Soil conditions must also be analyzed for bridge, highway, and dam projects. Lawsuits brought because of building collapse due to substandard soil conditions often involve the soil engineer who first inspected soil properties.
Structural Steel Erection Contractors
Structural steel forms the skeleton of many commercial structures. Any errors in the construction process can violate the entire structure’s structural integrity. Employees often work at heights. Cranes and other large, expensive contractor’s equipment must be used. Substantial inland marine equipment schedules, significant liability exposures, and potential for serious workers compensation injuries make this a difficult class to insure.
General contractors or project owners may purchase liability and workers compensation insurance for all operations on a specific construction project, including those that subcontractors perform. Many states have criteria for approving such programs and they must meet certain contract cost requirements. The use of wrap-ups brings all construction insurance costs and coverages into a single workers compensation policy and a single CGL policy which can eliminate gaps in coverage and non-concurrency of limits and policy language.