Pollution/Professional Liability

No construction risk management program is complete without a comprehensive risk profile of pollution and professional liability exposures.

While many firms may have only an incidental exposure, the size and scope of pollution and professional liabilities can devastate even the strongest balance sheet. It's these, often uninsured, liabilities that keep us up at night.

Whether it's design-build projects, in-house design services, subcontracted design services, or professional liability associated with "at risk" construction management, most firms have an exposure to professional activities to which the standard general liability policy is not designed to respond.

In addition, all contractors face environmental liability whether it is on the job site, during transportation, or during waste disposal activities.

Once your risk profile is evaluated, a protection system should be established to avoid any uncovered liabilities if your firm is named in a negligence action involving professional services or pollution liability.

Identifying Cold Stress Injuries 

With the coldest months soon upon us in many parts of the country, dangers of cold stress injuries become more prevalent. When an individual works in cold conditions, their body temperature can drop below normal, causing serious health conditions to occur.

Industries with the highest rates of cold stress injuries include heavy construction, oil and gas extraction, trucking and warehousing, protective services, electric and gas utilities, and sanitation.

Fortunately, identifying ways to protect workers doesn't have to be difficult. This free white paper from Amerisure Insurance will arm you and your employees with the needed information to help avoid cold stress injuries. 

Indiana Changes Workers' Compensation Exclusion

Recently, insurance carriers in the State of Indiana have included an exclusion to commercial general liability, commercial auto, commercial umbrella, and other similar liability policies.

This wording excludes workers' compensation losses from being paid out under these liability policies when an insured fails to obtain from a contractor, or subcontractor if the insured is a contractor, a certificate from the State workers' compensation board showing that the contractor/subcontractor has complied with the applicable workers' compensation insurance requirements.

In Indiana, this procedure is referred to as "Independent Contractor Affidavit of Exemption". The process provides for exemption of workers' compensation for entities that are sole proprietors, partners, or members of an LLC that have no employees and/or do not want to cover themselves for workers' compensation losses.

Adding this additional exclusion for workers' compensation came as a result of a recent Indiana Supreme Court ruling where the Court ruled that a farm personal liability policy can be used to compensate the injured worker of an independent contractor that did not have workers' compensation coverage, nor did the independent contractor provide a valid Independent Contractor Affidavit of Exemption.

As a contractor utilizing subcontractors, it becomes even more important to use the proper risk transfer techniques of either obtaining evidence of a valid workers' compensation policy through a certificate of insurance or by obtaining a copy of your subcontractors' valid Independent Contractor Affidavit of Exemption issued by the Indiana Department of Revenue/Workers' Compensation Board of Indiana.

For additional information regarding proper risk transfer techniques, please contact us at 574-245-3532 or bpearson@gibsonins.com.

Meet Bill Cerney: Gibson's Surety Practice Leader

Bill joined Gibson's construction team as the surety practice leader in the spring of 2012. 

He is responsible for overseeing in-house financial statement underwriting and analysis, working with staff and clients on bid requirements and specification analysis, meeting with clients and their accountants, and managing the overall surety relationship. Bill's construction specific knowledge and expertise complements Gibson's strong construction team and bolsters Gibson's abilities to serve and bring value to all types and sizes of contractors.

Bill has experience with a wide range of contractors - from small, local contractors to ENR top national contractors, including general contractors, specialty subcontractors, heavy-highway/civil contractors, and architectural and engineering firms. 

Prior to joining Gibson, Bill worked for over 12 years in public accounting - gaining experience in performing and managing assurance, tax, management and owner consulting services. 

In addition, he has experience with job cost validation, process consulting, internal control strength and weakness identification, succession planning, incentive compensation plans, contract administration, construction accounting systems, state pre-qualification reporting, employee stock ownership plans, and various types of employee benefit plans.  

Your Surety Relationship

Although it is typically associated with insurance agencies, surety bonding is not insurance. With insurance, a claim is paid using the premiums from the other insureds.

In surety, the surety company ensures the project gets finished. If not, they look to get reimbursed by the contractor and other companies or individuals that agreed to provide indemnity to the surety.

A surety relationship is much closer to that of a banking relationship, focusing on financial statement underwriting as well as understanding the contractor's business.

In today's environment with much of the available work coming from public funds or private entities that are looking to ensure a contractor will not fail, access to adequate surety credit can be the difference between survival and closing up shop.

Your surety agent plays the critical role of getting you adequate surety capacity and obtaining the most favorable rates that your underwriting case will provide.

Having the right surety advisor provides a distinct advantage when presenting your case to the surety markets. This person should:

• Understand construction financial statements in the seemingly ever-changing world of generally accepted accounting principles
• Be able to communicate competently with your CPA and understanding of the rules with which they live
• Take your information and present it in the best possible light to the surety marketplace

Talk with us to learn about our surety expertise and how we can help get you connected with the right surety.

Contractor Insurance Is Not A Commodity

Not all insurance programs designed for contractors are equal. While it may be important to the bottom line, paying attention only to rates and premium costs, may leave you lacking in important coverage areas.

Although certainly not a comprehensive list, the following gives further insight to other factors that should be considered when evaluating or comparing insurance programs for contractors:

• Insurance carrier should be a long-term player in the construction world
• Consider A.M. Best rating of the carrier
• Program should include coverage considered key to construction firms
• Per project aggregate limits which broaden liability limits
• Blanket additional insured endorsements that lessen the need to endorse additional insureds on a specific job basis
• Contractors' equipment that includes automatic coverage for equipment you lease, rent, or borrow from others and newly acquired equipment
• Blanket installation floater that protects your materials and labor designated for a specific project
• Pollution liability that extends to pollution incidents on construction sites and during transit
• Contractors errors & omissions which protects against errors made by specialty contractors providing design services

Please contact us at 574-245-3532 or bpearson@gibsonins.com to discuss your construction coverage needs.