Attendance at the two dates you are assigned is mandatory

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• 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

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Construction Engineering 221

• Construction Insurance
• Part 2

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RPQ

• 1. Professional liability risk would more
  likely apply to a design-build contractor rather
  than a general contractor.
• A. True B. False
• 2. Workers 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

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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

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RPQ

• 2. Workers Compensation pays only medical
  costs associated with an accident.
• A. True B. False
• The correct answer is B. False (also pay for
  lost wages)

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RPQ

• 3. Wrap-Up Insurance is provided by the
• A. General Contractor
• B. Owner
• C. Architect
• D. Construction Manager
• The correct answer is B. Owner

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Builders 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

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All-Risk Builders 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

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Subrogation Clause

• Subrogation gives the insurance company the right
  to sue the offending party in the insureds name
  for recovery of its loss
• This clause could defeat the entire purpose of
  the property insurance Builders Risk Insurance
  policy
• The use of Named Insureds helps avoid the
  undesirable effects of subrogation

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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

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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

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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

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Workers Compensation InsuranceThe Underlying
Economic Principle

• The costs associated with an on-the-job injury
  or death of an employee, regardless of fault, is
  an expense of production and should be borne by
  the industry.

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Workers 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

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Workers 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

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Workers 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

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Workers Compensation Insurance

• Workers 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!

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Employers 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 contractors
  defense as well as any judgment (up to face
  amount of policy)

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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?

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Umbrella Excess Liability Insurance

• Liability claims may fall between the coverage
  carried under separate underlying liability
  policies
• Raises the policy limits of the contractors
  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)

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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

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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.

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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

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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

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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