The construction and real estate industry continue to grow and so do the risk exposures from a fundamental inconsistency between a contract’s commercial intent and insurance policy language. “Additional Insured” is a very common requirement in a real estate or construction contract and many times there is a distinct lack of specificity with what is, actually, being required and why the provision is appropriate.  Additional Insured status provides vicarious liability coverage to an outside entity, usually, an owner or general contractor, under the subcontractor’s policy. It is often a requirement in construction contracts, and it can be the source of insurance disputes if not handled correctly given the changes in the regulatory framework of today’s insurance policies.

One of the areas often overlooked, but vital to an insured, is the defense costs coverage a liability policy provides. As some insureds may be aware, there are two types of defense costs payments, those policies that pay “in addition” to the limits and those whose payments are “within” the policy limits.

Soft cost, or delay in the project completion coverage has been a hot topic of discussion and concern recently due to the unique claims scenarios that occur during a construction phase of a project. At first glance, the term “soft costs” seems easy to explain. But it's actually a more complex subject.

It should not be surprising that as technology evolves, so does the way that these innovations are implemented in everyday business. The construction industry tends to exemplify this notion, as new equipment that increases efficiency at the worksite is utilized and embraced. Construction giant, Komatsu, announced this month that it plans to release a series of drones that will be capable of providing the heavy lifting of the foundation work in new construction, deeming the process: “Smart Construction.” This includes equipment such as “aircraft, bulldozers, and excavators” operating unmanned, all of which could, drastically, change the landscape of construction contracting.

As you may or may not have heard, there is currently a bill sitting in the New Jersey Legislature, which, if passed, would swiftly alter the landscape of commercial liability policies for New Jersey construction contractors.

Contracts, Insurance and Certificates…..the saga continues….

As a follow-up to my colleague’s recent post in Construction Executive, I wanted to emphasize the need for properly written contracts.  In construction projects, the contract documents form the basis of the agreement between the parties involved in the project. Written construction contracts impose many duties, obligations and liabilities on contractors. Although project owners pay great attention to the operational issues addressed in these contracts, many pay too little attention to the risk and insurance implications of various contract provisions.

Each week, landlords and authorities discover 300 methamphetamine labs in the United States, according to National Public Radio. If you own apartments, rent hotels or run boarding homes, you may run into a tenant who decides your rental properties are a great place to cook meth. Better check your commercial property policy now, because recent changes in commercial property insurance coverage forms may significantly restrict coverage for the resultant clean-up from meth “cooking” operations.

The recent spate of construction site accidents in New York City in the past several months couldn’t have come at a worse time.

In a disturbing ruling by the Georgia Court of Appeals on October 5th 2011, the interpretation of language in an OCIP Program sponsored by the Atlanta Hartsfield Jackson International Airport was held to create a third-party beneficiary relationship for the estate of the injured worker. The contract stated the city's OCIP was "to provide one master insurance program that provides broad coverages with high limits that will benefit all participants involved in project".

Controlled Insurance Programs (CIP) are becoming more and more common today but a contractor must be very careful to examine the terms and conditions of the CIP carefully as this may be their sole source of coverage. One of the most misunderstood issues is what happens when a CIP is cancelled. Virtually every CIP program has a section in the “manual” that allows for the program to be cancelled with some notice (hopefully) to the contractor. In many cases it could be a short as 30 days. What happens to the bid-deducts? Can you now submit a change order to increase your cost to Include insurance? Does the work you did prior still get coverage under the CIP? What about completed operations? To complicate matters many contractors have a “absolute wrap-up exclusion form [ISO CG 2154]. Pay close attention to the third condition in the second column that states “this exclusion applies whether or not the consolidated (wrap-up) insurance program: (3) Remains in effect” – So, when the CIP is cancelled the contractor can find themselves without ANY coverage unless they can scramble to get an exception to the exclusion.