Transcript     Attendance at the two dates you are assigned is mandatory  Presentation date  Evaluation date Attendance at the other eight (8) class dates will.





Attendance at the two dates you are assigned is
mandatory
 Presentation date
 Evaluation date
Attendance at the other eight (8) class dates
will count as extra points toward your total
points for EXAMS
Class attendance grade will be based on a total
of 52 class periods, not 60 as shown on Course
Schedule
Need video camera operator for each
presentation date – double credit 2 pts/class
1
Construction Insurance
Part 2
Construction Engineering 221
2
RPQ
1. Professional liability risk would more likely apply to
a design-build contractor rather than a general
contractor.
A. True
B. False
2. Worker’s Compensation pays only medical costs
associated with an accident.
A. True
B. False
3. “Wrap-Up Insurance” is provided by the
A. General Contractor
B. Owner
C. Architect
D. Construction Manager
3
RPQ
1.Professional liability risk would more
likely apply to a design-build
contractor rather than a general
contractor.
A. True
B. False
The correct answer is A. True
4
RPQ
2.
Worker’s Compensation pays only
medical costs associated with an
accident.
A. True
B. False
The correct answer is B. False (also pay
for lost wages)
5
RPQ
3. “Wrap-Up Insurance” is provided by the
A.
B.
C.
D.
General Contractor
Owner
Architect
Construction Manager
The correct answer is B. Owner
6
Builder’s Risk Insurance






Most widely used Project Property Insurance
Not use by engineering contractors – why?
Provides property coverage only
Does not include liability coverage in any form
Deduct cost of land prep and foundation – why?
Premium mainly dependent on:
 Type of construction
 Availability of fire-fighting facilities
7
All-Risk Builder’s Risk Insurance




Widely used on projects – covers all risks
Covers:
 Project proper – building
 Temporary structures on jobsite
 Materials in transit, stored on site & not yet
installed
Very flexible coverage is available
Exclusions and inclusions can be customized
8
Subrogation Clause



Subrogation gives the insurance company the
right to sue the offending party in the insured’s
name for recovery of its loss
This clause could defeat the entire purpose of
the property insurance – Builder’s Risk
Insurance policy
The use of “Named Insureds” helps avoid the
undesirable effects of subrogation
9
Named Insureds


List of “Named Insureds” usually includes:
 Owner
 Architect and all other consultants
 General contractor
Subrogation cannot usually be employed against
parties named as in the “Named Insureds” list
10
Waiver of Subrogation


Parties waive their rights to subrogation
Many Owners and general contractors require
subcontractors to include a “Waiver of
Subrogation” clause as part of their insurance
coverage
11
Professional Liability Insurance


Professional liability insurance provides
protection from:
 liability arising out of errors
 omissions
 or negligent acts of the insured in performing
design and other professional services.
Needed by design-build contractors to cover
designers
12
Worker’s Compensation Insurance
The Underlying Economic Principle
The costs associated with an on-thejob injury or death of an employee,
regardless of fault, is an expense of
production and should be borne by
the industry.
13
Worker’s Compensation Insurance


Exclusions:
 Domestic servants, farm labor, casual employees,
independent contractors, and workers in religious
or charitable organizations
 In some states – business that employ less than a
specific number of employees
When injured worker accepts W.C. benefits – they
forfeit the right to sue their employer
 Except in gross negligence by the employer
14
Worker’s Compensation Insurance




Compensation
 Medical benefits shall be provided without
limitation as to maximum total cost
 Wage compensation shall be paid for as long
as the worker is disabled
Include occupational disease (asbestos)
Provides legal defense to the insured
Some states allow self-insurance
15
Worker’s Compensation Insurance

Manual Rate set by state rating bureaus
 Adjusted annually
 Vary by state and classification of work
 Higher premiums for higher risk work
 Roofing, Masonry, Carpentry, Painting,
Structural Steel work
 How large an expense is workers
compensation insurance? (up to a $1 per $1)
 Need for loss reduction programs
16
Worker’s Compensation Insurance

Worker’s compensation insurance companies
have become active participants in the field of
construction safety and have established merit
systems whereby contractors are rated
according to their accident experience.
A good safety record lowers
workers compensation insurance
SAFETY PAYS!
17
Employer’s Liability Insurance


Coverage when an accident falls outside the
coverage of workers compensation
 Company did not provide a safe work site as
stipulated by state law – injured elects to sue
 Employee injured in another state in which
the contractor is not covered
Will pay legal costs incurred in contractor’s
defense as well as any judgment (up to face
amount of policy)
18
A few questions…..


What are the three purposes of Umbrella Excess
Liability Insurance?
What is Wrap-Up Insurance? And why can it be
important on large jobs?
19
Umbrella Excess Liability Insurance



Liability claims may fall between the coverage
carried under separate underlying liability
policies
Raises the policy limits of the contractor’s
existing liability insurance
Provides some coverage that are not covered by
the underlying liability polices (self-insured for
damage to other property outside the
construction site - $25,000 deductible umbrella
policy)
20
Wrap-Up Insurance




All insurance is purchased by the Owner. No
insurance cost from general contractors or
subcontractors
All claims are handled by central agency – quick
claim service and centralized safety inspections
May save owner money on very large projects
DISADVANTAGE: No incentive for contractors to
prevent claims – their insurance risk rating in
not impacted
21
Unemployment Insurance



Coverage required by federal and state law
Weekly benefit payments to workers whose
employment is terminated through no fault of
their own
The cost of the unemployment compensation
system is paid for by employers through federal
and state taxes.
22
Unemployment Insurance Questions
How can an employee disqualify himself from
unemployment benefits?
 Voluntarily quitting their last job without good
cause
 Discharged for misconduct
 Being directly engaged in a strike or other labor
dispute
 Failing to apply for or accept an offer of
suitable work
23
Unemployment Insurance Questions
How long can an employee draw unemployment?



26 weeks (paid by state) or
39 weeks (paid by state and federal) if
unemployment reaches a certain level or
More than 39 weeks (paid by federal
government) in some areas if national
unemployment rate is high
24
Certificate of Insurance

Printed form executed by insurance company
that a named insured has in force the insurance
designated by the certificate
 ACCORD form is standard
 Proof of proper insurance coverage per
contract
 Includes list of “Named Insureds”
25