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Gain insights on insurance basics, certificates of insurance, and premium control in construction contracts by Scott Durbin, AAI Vice President. Understand key areas of insurance coverage, subcontractor liability, and insurance requirements. Learn how to navigate insurance audits, additional insured status, waivers of subrogation, and more. Stay informed about essential coverages like general liability, workers' compensation, and umbrella/excess policies. Join us to unravel the complexities of insurance in construction projects.
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NCSHP Spring Meeting 2015Nebraska Construction Safety & Health Professionals Working with Certificates of Insurance & Controlling Your Premiums By Scott Durbin, AAI Vice President
Disclaimer The information contained herein is intended for informational purposes only and does not constitute legal advice. For legal advice seek the services of a competent attorney.
Agenda • Insurance Coverage Basics • Construction Contracts – Who needs them? • Insurance Requirements • Understanding the Acord Certificate • Details – Details – Details • The Good, the Bad, & the Ugly • NCCI; SCOPES; Mods; & other weird words • The Dreaded Insurance Audit • Questions
Insurance Coverage Basics • Property • Builders Risk vs Installation Floater • General Liability • BI &PD • Additional Insured and Other Specifics • Auto Liability • Workman’s Compensation • Waiver of Subrogation • Umbrella / Excess & Other Coverages
Insurance Coverage for Subcontractors General Liability – • Limits of at least: • $1,000,000 Per Occurrence • $2,000,000 General Aggregate • $2,000,000 Completed Operations Aggregate • $1,000,000 Personal and Advertising Injury • General Aggregate to apply on a Per Project Basis • Owner/general contractor shall be named as Additional Insured on a primary and non-contributory basis including completed operations
Insurance Coverage for Subcontractors General Liability (continued) - • Additional Insured status shall be maintained for _____ years • Sub-contractor agrees to waive its rights of recovery/the policy to waive subrogation • 50’ railroad right of way exclusion must be deleted. • Products and completed operations shall be maintained for 2 years after final acceptance and payment. • Electronic data liability insurance, with a limit of $50,000
Insurance Coverage for Subcontractors Automobile Liability – • Limits of at least: $1,000,000 CSL Per Accident • Coverage shall apply to all Owned, Hired, and Non-Owned Autos. • Endorse the policy to waive subrogation • The 50’ railroad right of way exclusion must be deleted.
Insurance Coverage for Subcontractors Workers Compensation – • Limits: Statutory coverage for the state where the project is located. • Employers Liability limits: $500,000 Each Accident • $500,000 Disease – Per Person • $500,000 Disease – Policy Limit • Sub-contractor agrees to waive its rights of recovery/policy to waive subrogation
Insurance Coverage for Subcontractors Umbrella / Excess – • Limits of at least: $2,000,000 Per Occurrence • Policy shall provide liability coverage over the specified Workers Compensation/Employers Liability, Commercial General Liability and Auto Liability. • Policy shall be Primary/Noncontributory coverage • Sub-contractor agrees to waive its rights of recovery/policy to waive subrogation
Insurance Coverage for Subcontractors Pollution Liability – (if applicable) Limits of at least: $1,000,000 per occurrence; $1,000,000 aggregate Professional Liability (applicable for subcontractors providing or is responsible for providing design/engineering/surveying services): Limits of at least: $1,000,000 per occurrence; $1,000,000 aggregate
Insurance Coverage for Subcontractors Riggers Liability – (if applicable) Should work involve the moving, lifting, lowering, rigging or hoisting of property or equipment Subcontractor shall carry Rigger’s Liability Insurance Cargo Coverage – (if applicable) Should work involve hauling of Materials or Equipment owned by Contractor/Owner. Subcontractor is responsible for the Replacement Cost of the goods.
Insurance Coverage for Subcontractors • Builders’ Risk: • The contractor or owner may provide builders’ risk insurance • Check contract to see who is responsible • Contractor/Sub may be responsible for deductible
Construction Contracts – Who needs Them? • AIA • EJCDC – Engineers Joint Contract Documents Committee • AGC • ConsensusDocs • GC’s or Owner’s Own Contract – READ IT! • Without a contract both your insurance agent and your attorney will be lost
Insurance Certificate = Details – Details - Details • The cert is just a snapshot in time • It does not change the insurance contract • It does not give or take away any coverage in the policy • Coverage shown on cert may require a contract to be in place (Additional Insured & Waiver of Subrogation) • You need to be a certificate holder! (don’t take a sample)
Deal Makers / Deal Breakers • Have a contract in place prior to work! • Have a cert issued to you • Ask for Additional Insured status • Ask for per project aggregate • Ask for primary & noncontributory • Ask for Waiver of Subrogation on GL & WC • Get it right before the work starts!
NCCI; SCOPES; Mods & other weird stuff • NCCI – National Council on Compensation Insurance • SCOPES – NCCI WC Classification Codes for Workers • MOD – Experience Modifier; Experience Modification; E-Mod • Monopolistic Fund States – ND, OH, WA, WY (Puerto Rico & US Virgin Islands) • Med Only – NE = 30% • Indemnity Claims = 100% gets reported, MMI • Permanency = Disability Rating, LOE, Voc Rehab
The Insurance Dreaded Audit • What gets audited? GL & WC • W2, 941, & Subcontracted Work/1099’s • Show them your certs • “The state says I don’t need work comp!”
