Traditionally, each participant in a construction project obtains insurance individually to protect against the risk of financial loss. In recent years, “wrap-up” insurance programs have emerged as an alternative to the traditional method of risk management. In a wrap-up program, the project owner can purchase an insurance policy that will cover the participants involved in the construction project, including the owner, construction manager, general contractors and subcontractors. Typical wrap-up policies provide coverage for workers’ compensation, general liability and builder’s risk; however, program features vary based on the insurance company and the type of project. Continue »
Prevailing business wisdom holds that the way to reduce credit risk is to limit credit lines, be stingy in allowing credit and freeze orders on past due accounts. This line of thought posits that it is generally impossible to lower “bad debt” losses without adverse consequences to sales and business expansion. Read The Full Story »
A surprising lack of uniformity in state laws exist that are applicable to fairly common construction contract provisions. Even within states, courts are less than uniform in their approaches, and many states’ statutes and court decisions did not address critical questions about the enforceability of the provisions. In the previous issue of Risk Management, Leavitt and Rosenberg addressed pay-if-paid/pay-when-paid contingencies, no damage for delay, change orders, no lien clauses and statutes of limitations clauses in contracts. Here are five more clauses that may or may not be enforceable.
Prudent contractors protect themselves from liability arising out of their work on a construction project by maintaining standard commercial general liability (CGL) insurance. What contractors often do not realize, however, is that a CGL policy generally does not provide coverage for claims by dissatisfied owners for the cost to repair or replace allegedly defective work. Such claims, which can present a significant exposure to a contractor, instead are governed by the contract between the contractor and client.
While building the $1 billion PortMiami tunnel underneath the cruise ship channel to the port, Bouygues Civil Works Florida Inc. (BCWF) encountered a significant issue due to unexpected geologic conditions and its request for relief due to the differing site condition was denied by the Florida Department of Transportation (FDOT). The resulting dispute easily could have caused significant delays–perhaps even bringing the massive tunnel-boring machine nicknamed Harriet to a halt–without an agreement to resolve disputes by a Technical Dispute Review Board (TDRB).
It is the nature of the business for utility contractors to face high risk and the potential for sizeable losses. Learning to assess relative risk is crucial to protect and grow a utility contracting business. While most small utility contractors understand many things can go awry and lead to financial loss, they also need to thoroughly understand uninsurable risks and exposures, as well as the potential of any incident that could exceed their insurance coverage. Continue »
W. Edwards Deming, a pioneer in the quality movement that occurred decades ago, succinctly described how a process works: inputs lead to outputs. In other words, companies are no better than how they perform a process, and they are fooling themselves if they believe the firm is doing well simply because of an absence of poor outputs. Continue »
Each year, the Merchants Bonding Company™Leaderboard Program salutes agency partners who have demonstrated their surety savvy and collaboration for growth. We salute Shorewest Surety Services of Franksville, Wisconsin for attaining the Champions Tour of surety professionals. Congratulations to Tom Chambers, Todd Schaap and Dan Gibson for surety professionalism in 2012. Merchants Bonding has partnered with Shorewest Surety Services for more than five years. We thank them for the successes we’ve had together and recognize them for sharing our common sense vision. See our online salute to Shorewest Surety Services of Franksville, Wisconsin, here. Continue »
General contractors and subcontractors are often so eager to win a bid on a project that they may sign off on a contract provided by the owner or developer that doesn’t allow for every contingency. These contracts tend to heavily favor the project and usually do not protect the contractor’s best interests.
FMI’s Andrew Patron, Zurich’s Karen Schwartzkopf, and Lockton’s Tom Miller continue their discussion on the importance of safety and becoming risk-aware. Understanding risk and communicating those risks clearly to everyone in your company is paramount to managing risk. (Click [here] to read Part I and [here] to read Part II of this Q&A.)
Each year, the Merchants Bonding Company™Leaderboard Program salutes agency partners who have demonstrated their surety savvy and collaboration for growth. We salute Security Insurance Services of New Berlin, Wisconsin for attaining the Champions Tour of surety professionals. Congratulations to Rob Tortelli for surety professionalism in 2012. Merchants Bonding has partnered with Security Insurance Services for over a decade. We thank them for the successes we’ve had together and recognize them for sharing our common sense vision. See our online salute to Security Insurance Services of New Berlin, Wisconsin, here. Continue »
Nobody likes a lawsuit, but the construction field is full of them. Lawsuits are expensive, time-consuming and stressful, and all too often they don’t work out the way we want them to. A good lawyer can certainly make the process much easier, but wouldn’t you rather avoid the lawsuit in the first place? Continue »