Transcript RIMS Construction DRAFT Deck

The Unique Risk of Construction
Wrap-up Policies
Agenda
•
•
•
•
•
•
•
Presenters
History of Wrap-up Policies
CIP Terms & Types
Differences: General vs. Wrap-up Policies
Advantages & Disadvantages
Discussion Points
Ethical Considerations
2
Presenters
• Brian Trusky
– Vice President, Loss Prevention - Moss &
Associates
• Thomas Martyn, Esq.
– Law offices of Martyn, Toher, Martyn (LM)
• Thomas McBride, Esq.
– Partner, Delaney & O’Brien
3
Market History of Wrap-up Policies
• Origination of Policy Type
– Why existing insurance products didn’t fit need
– Period of use
• Areas of Historic Use
– Commercial Developers
– Government Projects
– Large Public Projects
• Ex:
4
CIP Terms & Types
• Controlled Insurance Program (CIP)
–
–
–
–
–
Centralized and controlled insurance and risk program
Sponsored by contractor or project owner
Covers owner, and participating contractors and subs
Maintains overall responsibility for worksite& safety
Claim management & involvement
• CIP Sponsor
– The party who purchases the Wrap Up policy
• CCIP
– Contractor is the sponsor
• OCIP
– Owner is the sponsor
5
CIP Terms & Types
• Maintenance CIP
– Ongoing contract work for ongoing facilities
– CIP remains in place
– Contracted work added as it occurs
• Rolling CIP
– Ongoing CIP
– Insure multiple construction projects
• Other Types
– Residential, Environmental, GL only, International…
6
CGL
CIP
Intended for insured’s
entire operation
Site specific coverage
Named insured is our
client
Enrolled subs also
become our insured’s
Policy forms are
largely the same
Endorsement unique/
provides Tail coverage
1 year policy
Multi year policy
Why CIP Over Traditional CGL?
CIP
• Sponsor buys insurance for
contractors
• One broker and one carrier
• Uniform coverage and limits
• One rate
• Uniform safety approach
• Select litigation and claim
dashboards can be mitigated
• Better Monitoring of
Settlement/Closeout
CGL
• Insured buys insurance from
contractors
• Different brokers and
carriers
• Various coverage and limits
among all parties
• Various rates
• Various safety approaches
• Litigation and claim
vulnerabilities
8
Project Close-Out
• Close-Out vs. Termination
• Factor: High Unemployment rate
• (need additional bullets)
9
Removes litigation
efforts for:
- Proving/disproving
contractual defense
- Indemnification claims
Only one defense
office handling the
defense of plaintiff’s
claim
Provides for unified
Securing the
and more efficient
cooperation of
approach to the
multiple subdefense and litigation
contractors
strategy
- May no longer have
working ties with the
owner and/or general
contractor
No co-defendant
disagreement
regarding
Issues that can arise
when contractors do
not unite/agree
- Settlement
- GL not named in suit, but is
- Arbitrations
- Mediations
paying legal costs
- Sub-contractor disagreement re:
Strategy
- Claims needs to separate
handling
Cuts down
significantly on time
spent on litigation
- Co-defendants discovery
demands
- Interrogatories
- Depositions
- Contractual indemnification
claims
Only one office to
coordinate multiple
responses to
interrogatories,
depositions,
discovery responses
Trials
- Avoids Jury Sympathy
Single plaintiff’s attorney up
against multiple defense
attorneys
- Avoids Jury Confusion
Multiple defendants, multiple
positions, opinions and
conclusions
Trials
- Jury awareness that
insurance is involved
- Jury confusion about
attorneys role in
representing multiple
parties
Ethical Conflicts/Considerations
• How to identify the client
– Areas of potential GC/Sub conflict of interest
• Understand claims handling and reporting needs of
case
• Do you need separate handling of case?
– Different Claims handler
– Different attorneys
• Addressing cross-claim issues
• Why a unified defense might not be possible
• Terminating CIP Program
18
Questions?
19