Industrial Goods and Services

September 10, 2013

Dental School Facility Construction

Single prime design delivery system for construction of a new dental school facility associated with a University. University made claim against the architect alleging design errors relating to structural steel; Life Safety Code violations; non-insulated pipe failures;  failure to properly staff project; failure to perform contract administration duties; lost value engineering opportunities; and project delay. Total asserted value of the claim exceeded available design professional insurance.

 …

September 4, 2013

Dental School Facility Construction

Single prime design delivery system for construction of a new dental school facility associated with a University. University made claim against the architect alleging design errors relating to structural steel; Life Safety Code violations; non-insulated pipe failures;  failure to properly staff project; failure to perform contract administration duties; lost value engineering opportunities; and project delay. Total asserted value of the claim exceeded available design professional insurance.

 …

May 21, 2013

Claim Scenario – Structural Engineer: Condo

Facts: Insured provided structural engineering services in connection with a structural podium, which was to support a 4 story wood frame condo. Insured contracted directly with the developer/GC. The insured discovered that there were beams, which were undersized in the structure.

Claim against the insured: Initially it was believed that beams were undersized and needed to be redesigned. During the investigation process, it was discovered that there were several other issues requiring remediation. Initial repair estimate was approximately $60,000.

Other remediation issues: loss of parking spaces, beams were too shallow as compared to the original design

Defenses: None, the insured admitted liability, including an agreement to redesign. It was hard to argue that they were not solely liable for the issued involving the shear reinforcement for the columns.

Policy Limit: $2,000,000 per claim, $160,000 deductible.

Resolution: Insured paid $1,059,677 to settle this matter.

 …

May 21, 2013

Claim Scenario – Bodily Injury/Civil Engineer

Facts: An employee at an automatic car wash was crushed by a truck when he jumped in front of it to try and stop it. The insured, civil engineer, designed a grading plan for a car wash over 16 years ago. The named insured acquired another firm and the predecessor firm was an additional insured on the policy. Plaintiff required a tracheotomy and claimed damages in excess of $5 million for future medical, pain and suffering and lost wages.

Claim against the insured: Plaintiff alleged that the engineer’s plans were deficient because they did not accurately reflect what the architect called for. The plaintiff’s theory was that the insured fell below the standard of care by not asking for additional information about the car wash.  The theory was that: (1) had this request been made, the insured would have learned about the manufacturer’s recommendation of 20′ of flat; (2) the insured would have incorporated this into the grading plan; (3) the grading would have been done per the insured’s plan and (4) the incident would never have occurred because the truck would have stopped within the 20′ section.

Defenses: The architect’s plans called for 20 feet of level pavement at the exit of the automatic car wash, but only 12 feet was actually level. The facility was not built to plan. When a dimension is not specified on the grading plans, the contractor should refer to the architect’s plans and if he had the contractor would have seen the 20 foot dimension. Engineer was also not retained to do site inspections and was not present during the grading process.

Settlement considerations: Architect was deceased and had no coverage. Plaintiff settled with the contractor, manufacturer and carwash for $2,775,000. Insured was left as last man standing and received a limits demand.

Policy Limit: $2,000,000 per claim, $35,000 deductible.

Resolution: Global settlement $3,725,000. Insured contributed $950,000. Defense costs $243,000.…

April 4, 2012

Mechanical Contractor – Hydraulic Fluid

Source: Rockhill Environmental/NECC Newsletter

A mechanical contractor improperly installed fittings during routine maintenance of a hydraulically driven conveyor system. A subsequent leak was not discovered until the next routine maintenance cycle. The leaking hydraulic fluid migrated into a floor drain located beneath the equipment which discharged directly into an adjacent drainage ditch. Property owners adjacent to the site noticed a sheen on the water in the ditch and requested an environmental investigation by regulators. The regulators mandated clean-up of the spill and the site owner subsequently filed actions against the mechanical contractor to pay for the clean-up costs.…

July 1, 2011

Mechanical Contractor – Hydraulic Fluid

Acknowledgement to Great American Environmental Division

A mechanical contractor improperly installed fittings during routine maintenance of a hydraulically driven conveyor system. A subsequent leak was not discovered until the next routine maintenance cycle. The leaking hydraulic fluid migrated into a floor drain located beneath the equipment which discharged directly into an adjacent drainage ditch. Property owners adjacent to the site noticed a sheen on the water in the ditch and requested an environmental investigation by regulators. The regulators mandated clean-up of the spill and the site owner subsequently filed actions against the mechanical contractor to pay for the clean-up costs.…

December 27, 2010

A Lapse in Judgment—and Insurance

A contractor subcontracted the design of a ventilation system to a mechanical engineer. The engineer miscalculated the cooling needs of the building and specified an inadequate ventilation system. Because of the system’s poor performance, the building owner demanded $180,000 to replace it. At the time of the claim, the mechanical engineer had let his Errors and Omissions policy lapse. Therefore, the contractor was held liable for replacing the system.

This is a claim scenario developed from a single claim or several claims and has been developed for illustrative purposes only.

September 21, 2010

Accident Ruptures Hydraulic Hoses

Acknowledgement to Great American

During construction activities, a crane used to lift concrete barriers overturned. The accident ruptured the crane’s hydraulic hoses spilling all its fluid onto the ground. The contractor was required to pay for clean-up costs arising from the spill.…

September 21, 2010

Leak Discovered After Fittings Improperly Installed

Acknowledgement to Great American

A mechanical contactor improperly installed fittings during routine maintenance of a hydraulically driven conveyor system. A subsequent leak was not discovered until the next routine maintenance cycle. The leaking hydraulic fluid migrated into a floor drain located beneath the equipment which discharged directly into an adjacent drainage ditch. Property owners adjacent to the site noticed a sheen on the water in the ditch and requested an environmental investigation by regulators. The regulators mandated clean-up of the spill and the site owner subsequently filed actions against the mechanical contractor to pay for the clean-up costs.…

September 21, 2010

Employees Sue Over Silica Dust

Acknowledgement to Great American

A masonry contractor, performing a renovation project at a historic building, was sued by employees of a nearby office building. The claimants asserted that they were exposed to silica dust coming from the job site.  The claimants reported damages for bodily injury asserting that required measures were not used to prevent or minimize dust emission during the project.…