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

111

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 InsurancePart 2

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RPQ1. 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 theA. General Contractor B. OwnerC. 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. FalseThe correct answer is A. True

555

RPQ

2. Worker’s Compensation pays only medical costs associated with an accident.

A. True B. FalseThe 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. OwnerC. ArchitectD. Construction Manager

The correct answer is B. Owner

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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

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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

999

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

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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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Worker’s 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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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

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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

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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

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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!

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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)

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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 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)

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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”