Minimizing the Financial Risk of the Project. (From Everyone's Point of View):
All too many times I have seen the profit on a project become severely reduced or even completely eliminated based upon an injury to a subcontractor's employee (Labor Law Cases) or property damage to a neighboring property, (General Liability Cases) when there is no insurance coverage. This is due in part to the cost of defending the lawsuit, but primarily because of the cost of paying the jury award, which can sometimes be astronomical. Also, many times, a client will come to see me after having previously placed a claim with their insurance carrier, only to find out that the insurance carrier will not cover the loss. This is called a "disclaimer." There are many reasons why an insurance carrier (especially in this economy) will often disclaim and refuse to provide a defense or indemnify a contractor or property owner. For example, the simplest reason is because the type of injury or damage is not covered by the policy. Many times, insurance brokers who typically sell life, health and auto insurance are unfamiliar with the types of policies which are needed in the construction industry. Another reason may be because the injury or damage was not reported on a timely basis. This happens when either the owner or contractor, or both, know about the injury or damage and try to resolve the loss with the injured party without immediately reporting it to their insurance carrier. More often than not, the injured party retains an attorney in the middle of negotiation with the contractor and owner and is no longer willing to "be reasonable." Then, the owner or contractor or both, report the case to their carrier, but the carrier disclaims because it did not receive notice of the claim right away. Another reason why an insurance carrier may not cover a claim is because the injury or damage may have occurred outside of the applicable policy period. For example, the policy period may start on March 14, but the damage or injury occurred on March 12th, just before the policy went into effect. Another example may be when an owner of a property adjacent to a construction site incurs damage to his property from earth movement or some other reason for which, the injured property owner has no insurance coverage. I have also handled cases where the construction work itself has been damaged during the project from fire or weather (Builder's Risk Insurance). Sometimes, the contract for construction may call for insurance, and the insurance was in effect at the beginning of the project, but the project has been ongoing for more than a year, and the policy simply lapses before the injury occurs. Other times, a party may simply fail to obtain the necessary insurance coverage because the premiums can be so high that some contractors will risk being uncovered. The reasons why there may be no insurance coverage are too numerous to mention them all here. If you do have an insurance coverage issue related to a construction project, Mr. Berkley can be of great assistance in negotiating on your behalf with you insurance carrier, or, representing you if you do not have coverage. Even if you do have coverage, you should contact Mr. Berkley if you are not satisfied with the representation supplied to by your insurance carrier.
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