Workers’ compensation

December 17, 2013

Marsh: Coverage rates continue to rise for U.S. construction firms

Source:, December 13, 2013

U.S. construction firms on average paid more for their insurance in the first half of 2013 as underwriters continue to seek price increases across the breadth of their contractor portfolios, according to a report published by Marsh.

Pricing for contractors general liability, project-specific general liability, umbrella and excess liability, workers’ compensation, and residential construction insurance was up between 3% and 7% on average during the first half of the year, according to Marsh’s Construction Market Update—First Half 2013. Construction firms with poor loss histories were more likely in general to have seen double-digit rate increases.

Pricing for non-residential construction, and contractors and architects and engineers professional liability insurance also was up on average during the first half of the year, but to a lesser degree.

“U.S. construction firms are grappling with a firming insurance market, especially when it comes to liability insurance where underwriters continue to tighten coverage terms and seek rate increases to make up for reduced investment income,” said Michael Anderson, leader of Marsh’s U.S. construction practice. “With a zero interest rate environment, there is no cushion against a poor underwriting decision.”

According to Marsh’s report, not all construction lines are experiencing rate increases. Premium rates for builders’ risk insurance generally remained flat during the first half of the year despite more demand for coverage. Similarly, contractors’ pollution liability rates remained generally flat to down 5%.

“While underwriters are attempting to gain rate increases, the market is awash in capital and new entrants are helping to maintain competition. The good news for well-managed construction firms is they can still generally find competitive pricing and terms,” Anderson said.


February 22, 2013

Consider This: Insuring New Construction and Renovation Projects

Source: MHN Online, February 8, 2013
By: Kevin Smith, Vice President & Real Estate Practice Group Leader, The Graham Company

While most property owners are familiar with coverage for their portfolio of properties, there are some unique provisions and exposures inherent in property under construction, whether new or renovation of existing buildings. A properly structured Builder’s Risk policy will ensure against the risk of loss or damage to these properties. However, it is not solely about the Builder’s Risk policy; the construction documents should clearly outline the requirements and responsibilities for Property as well as Liability insurance coverage. It is important to engage in conversations with your insurance broker and insurance companies regarding a specific project prior to the construction documents being signed to avoid any issues that may arise with obtaining adequate coverage for the project.

Property Coverage

There are several considerations that are important when structuring a Builder’s Risk policy for a project, such as:

  • Specifying the property covered
  • The parties insured
  • The coverage to be included

A Builder’s Risk policy is designed to cover the materials that are to be part of the permanent site once constructed; however, confusion may arise in a renovation project when there is an existing structure that needs to be insured as well. Other consideration needs to be given to covering materials off-site that are to become part of the finished project (even while in transit), as well as other tools, equipment and temporary structures erected during construction.…

January 17, 2013

Mondaq Business Briefing -Day Pitney LLP United States – Hurricane Sandy Creates Environmental, Safety And Health Concerns For Local Employers

Source: Mondaq Business Briefing, January 15, 2013
Posted on:

In addition to widespread power outages and property damage, Hurricane Sandy also generated a host of other issues for employers. One issue that local employers face is whether their worksites contain biological or chemical hazards due to flooding or contamination. A common concern for employers that have experienced flooding is the presence of mold in the workplace.

When employers expose employees to health and safety hazards, they expose themselves to potential workers’ compensation claims. Moreover, while workers’ compensation statutes generally bar tort claims in court, and restrict the availability of certain remedies, states typically allow employees to proceed with such claims in court where an employer is aware of serious hazards in the workplace and intentionally or recklessly exposes its employees to those hazards. In New Jersey, an employee must demonstrate that the employer committed an “intentional wrong” to overcome the workers’ compensation bar.

New Jersey employers should carefully assess their property, and other sites where their employers work, to determine if Superstorm Sandy created any health or safety hazards.

Originally published on the Employer’s Law Blog

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr James Boyan
Day Pitney LLP
7 Times Square
New York
Tel: 2122975800
Fax: 2129162940


November 12, 2012

Construction insurance fundamentals

Source:, November 2, 2012
By: Scott W. Davis, Bricker & Eckler LLP

“The Heiles argue that the policy exclusions relied on by State Auto do not apply here. Indeed, the policy is riddled with definitions, exclusions, exceptions, exceptions to the exclusions and exclusions to the exceptions.” Heile v. State Auto. Mut. Ins. Co. (1999), 136 Ohio App.3d 351, 353.

In interpreting an insurance policy, the court in the case above came to a simple conclusion that we all know: insurance policies are confusing! While the policies themselves may be replete with exceptions, exclusions and exceptions to the exclusions, the fundamental concept behind insurance does not need to be so confusing. Insurance is simply a tool to manage and transfer risk and it is an important part of the risk management strategy for any construction project.

Defining Insurance

An Internet search will reveal many different definitions of the term “insurance.” Essentially, insurance is a contract by which one party (the insurer), in exchange for consideration (i.e., money or a premium) promises to make payments upon the destruction or injury of something in which the other party (the insured) has an interest. See Couch on Insurance (3rd ed. 2009), Section 1:6. In construction contracts, the owner, contractor and design professional each seek protection from loss or harm related to the construction project through insurance policies. Each party is responsible for providing different types of insurance that offer protection during construction and after construction is complete.

Types of Insurance Coverage

Liability insurance and property insurance are the two common types of insurance coverages available and carried by most owners, contractors and design professionals. Property insurance protects the owner or user of physical property and equipment from losses due to covered perils such as fire or explosion. Liability insurance, on the other hand, protects the insured from claims arising from damage or hazards caused by the insured. It is common on most construction projects for the owner to provide property insurance while the contractor and design professional will provide liability insurance. The construction contract should define the types of coverage required of each party, the limits of coverage and any project-specific requirements applicable to the insurance that each party is to provide. For this reason, owners should consult with their legal counsel and insurance carriers to determine the appropriate types of coverages that should be carried on a project as well as the appropriate policy limits for each type of insurance.…

November 23, 2011

Construction insurance rates could be rising: Lockton report

Source:, November 22, 2011

Insurance rates for construction contractors, architects and engineers could be on the rise, according to new market reports from Lockton Cos. L.L.C. released this week.

Unprecedented property losses stemming from natural catastrophes, anemic interest rates and worsening workers compensation results may conspire to drive up construction contractors’ premium rates on commercial general liability, builders risk and workers compensation in 2012, executives from Lockton wrote in its report.

“The market is clearly firming in chosen segments and geographies, and while most would hesitate to predict a ‘hard’ market, pricing is under pressure,” the company’s report on the construction market said. Insured losses from events such as the March 11 earthquake and tsunami in Japan, the flooding in Australia and Thailand, Hurricane Irene and the rash of tornadoes, windstorms and wildfires in the United States have been predicted to dampen capacity in vulnerable territories.

Depressed interest rates

At the same time, depressed interest rates also left many insurers unable to offset their cat losses with investment income, said Lockton Senior Vps Jody Wright, Jaime Knoop and Paul Primavera, the report’s authors.…

July 27, 2011

Families of workers killed in Falk Corp. explosion target Milwaukee

Source:, February 8, 2007
By: Joe Grundle

The families of three workers killed in the Dec. 6 propane explosion at the Falk Corp. plant have sued Milwaukee mechanical contractor J.M. Brennan Inc. for negligence.

Robert Habush, attorney for the families of Thomas LeTendre, Curtis Lane and Daniel Kuster, announced the lawsuit Wednesday afternoon at Habush, Habush & Rottier S.C.’s downtown Milwaukee offices.

The suit, which asks for an unspecified amount of civil damages, was filed in Milwaukee County court Wednesday and alleges that J.M. Brennan improperly installed the pipes that leaked and led to the explosion.

“This section of pipe was supposed to be laid in sand and turned out to be laid on rocks,” he said. “That is how the corrosion that caused the leaks occurred.”

Rexnord Corp., Falk’s parent company, hired J.M. Brennan to work on the propane system at the Falk plant. Workers from J.M. Brennan were testing the site about 40 minutes before the explosion.

The lawsuit targets J.M. Brennan rather than Rexnord because Rexnord is protected from large civil liability claims under the state’s workers’ compensation law, which awards compensation to the deceased workers’ families but limits the damages they can receive to $233,200 per dependant. Also, Habush said counsel found no evidence of negligence on Falk’s part.…

April 7, 2011

XL Insurance unveils Electronic Data Destruction coverage for e-waste recyclers

Source: Datamonitor InsuranceWire, April 6, 2011
Posted on:

According to Rich Corbett, President of XL Insurance’s North America Environmental operations, “In the US alone, an estimated 400 million electronic units are discarded each year, creating an ever-growing stream of e-waste. As many electronics contain lead, mercury, cadmium and other pollutants, it’s an environmental issue of growing concern, prompting many states to take action. Some 24 states have adopted e-waste legislation banning the disposal of such items in the waste stream.

“While these laws present business opportunities for recyclers, these businesses have to be prepared and properly protected to take advantage of them because in addition to toxic chemicals, discarded electronics may also contain individuals’ or business’ proprietary information that also has to be handled appropriately”

In addition to Pollution and Electronic Data Destruction protection, XL Insurance offers General Liability, Automobile, Workers Compensation, Umbrella and Property coverages to the recycling industry.…

March 17, 2011

SC Supreme Ct. Decision Insults Builders Seeking Construction Defect Coverage According To Construction Insurance Specialist

Source:, February 15, 2011

In the recently filed case of Crossmann v. Harleysville, The SC Supreme Ct. reinstated the controversial line of “no occurrence claim denials” for construction defect under a General Liability policy. This ruling subverts the intent of the drafter’s of the General Liability policy form and manages to insult professional builders along the way, according to construction insurance specialist, John Sadler.

In Crossmann v. Harleysville, Opinion No. 26909, filed on January 7, 2011, the SC Supreme Court ruled that faulty workmanship which results in property damage to a builder’s work is no accident. Instead, such property damage is intended, foreseen, expected, and a natural and probable consequence of the builder’s faulty workmanship. Therefore, faulty workmanship does not rise to the level of an “occurrence” and as a result is not covered by a builder’s General Liability policy.…