Protect Against Design Errors With Owners Protective Professional Indemnity Coverage
March 14, 2018 —
Joseph Nawa – New Day Underwriting Managers, LLCPrior to the devastation caused by Hurricanes Harvey, Irma and Maria, the AIA Consensus Construction Forecast had predicted “slower growth for the construction industry for the remainder of 2017 and through 2018.” But, given the hundreds of billions of dollars in damages caused by these horrific events, Mark Zandi, chief economist at Moody's Analytics, estimates a lift to the economy through the rebuilding of these areas. This, of course, is dependent on insurer funds and the amount of aid offered through government sources.
Nonetheless, the process will be costly, timely and exhaustive. Under such circumstances, speed is a necessity. In addition to being drawn into the earliest stages of the project development cycle, the services of construction professionals have merged so intensely that even their “consultative advice” have produced exposures in “collaborative” environments rife with liability.
A challenge for contractors in today’s design/build marketplace is securing professional liability insurance policies that will not only manage the risks associated with their own errors and omissions, but also the problems caused by designers and others contracted to work on the project. However, this too is not very easy. Such policies when purchased by contractors can be exceedingly cost prohibitive.
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Joseph Nawa, Construction Executive, a Publication of Associated Builders and Contractors. All Rights ReservedMr. Nawa may be contacted at
joseph.nawa@newdayunderwriting.com
Seven Trends That Impact Commercial Construction Litigation in 2021
March 29, 2021 —
Jeffrey Kozek & E. Mitchell Swann - Construction Executive2021 stands to bring sizeable change to the commercial construction industry as trends that had been on the horizon meet the impact of the pandemic. That means it will be even more important for architects, engineers, contractors and owners to prioritize revisiting their project plans as the industry adapts so that they can better reduce their likelihood of facing litigation down the line.
While many in the industry will struggle to react to the ongoing environment, building stronger contractual understanding and preparedness to adapt could be the difference in being able to complete the work and move onto the next project in a timely manner. Meanwhile, contractors are using a wider usage of technologies for improved project communication and efficiency.
In the coming year, there are seven trends will have the greatest impact on commercial construction.
Reprinted courtesy of
Jeffrey Kozek and E. Mitchell Swann, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Sixth Circuit Holds that Some Official Actions Taken in the “Flint Water Crisis” Could Be Constitutional Due Process Violations
March 27, 2019 —
Anthony B. Cavender - Gravel2GavelIn what the Court of Appeals describes as “the infamous government-created environmental disaster known at the Flint Water Crisis,” a panel of the U.S. Court of Appeals for the Sixth Circuit has ruled that some of the government personnel responsible for this disaster may be liable, under 42 U.S.C. § 1983, for monetary damages based on the Substantive Due Process Clause of the Fourteenth Amendment to the Constitution. The case is Guertin, et al., v. State of Michigan, et al., decided on January 4, 2019.
On April 25, 2014, the City of Flint, MI, facing a financial crisis, agreed to switch its drinking water supply from the water provided by the Detroit Water and Sewerage Department to untreated water available from the Flint River that would be treated in the waterworks owned and operated by the City. However, the City waterworks could not provide the needed treatment, which resulted in the corrosive Flint River water leaching lead out of the old Flint water pipes. Soon thereafter, a public health and environmental crisis enveloped Flint. Many lawsuits have been filed against many defendants, and many civil and criminal investigations have been opened.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
No Coverage for Faulty Workmanship Based Upon Exclusion for Contractual Assumption of Liability
August 06, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe Supreme Court for West Virginia determined the policy's contractual assumption exclusion barred coverage for the general contractor based upon claims of faulty workmanship. J.A. St & Assocs. v. Bitco Gen. Ins. Corp., 2019 W. Va. LEXIS 205 (May 1, 2019).
J.A. Street & Associates, Inc. entered a contract with the developer, Thundering Herd Development, L.L.C., to build a commercial shopping center on seventy-eight acres of land. Street agreed to oversee the site preparation for the development and the construction of many of the buildings. Thundering Herd retained an engineering firm, S&ME, Inc. to do geotechnical exploration and to provide advice regarding land preparation for the shopping center. Thundering Heard also entered an agreement with the Target Corporation to construct a store on a pad to be prepared at the shopping center.
Street hired subcontractors to prepare the site by grading the land and installing fill material. A slope was constructed at the rear of the proposed Target site, but it failed, causing a landslide, damage to the pad, and damage to adjacent property owned by a third party. Thundering Heard incurred $721,875 in additional costs to repair this slope, reconstruct the Target site, and compensate the neighbor for the damage to the adjacent property.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Sustainability Puts Down Roots in Real Estate
January 27, 2020 —
Stephanie Amaru - Gravel2Gavel Construction & Real Estate Law BlogSustainability has evolved from a passing trend or niche preference into an undeniable, growing driver of the real estate market. This is particularly true as millennials comprise an increasing proportion of the workforce, home-buying population, and individuals influencing the future of real estate development in the United States.
If anything illustrates the significance of younger generations’ increasing interest in sustainability, it is the Global Climate Strike that drew participation of many thousands of young people, with 2,500 events scheduled in over 150 countries. In New York City, 1.1 million public school students were excused from school to join the strike in an event planned to precede the UN Summit, which itself was intended to push countries toward a commitment to faster transition to renewable energy and stricter climate targets. While both policymakers and citizens of previous generations have been split on their willingness to address global climate change with urgency, younger generations are feeling a stronger sense of responsibility for curbing the world’s trajectory towards a climate catastrophe, which will be inherited by them and their children. This has manifested in action that promotes awareness of and political action with respect to these issues—such as the Global Climate Strike—as well as evolving habits and preferences in both consumer goods and real estate.
Greener Space
In recent years, real estate developers have recognized that there is a market for “greener” developments that reduce annual expenditures on buildings, whether it be through small spaces requiring less electricity and promoting energy efficiency, or through renewable energy options such as solar photovoltaic power. Some real estate developers have chosen to install these options themselves, while others seek out sustainable financing options to cover the costs of renewable energy. If installing renewable energy is too costly, real estate developers will seek out more cost-effective locations for their brick-and-mortar operations.
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Stephanie Amaru, PillsburyMs. Amaru may be contacted at
stephanie.amaru@pillsburylaw.com
The Little Ice Age and Delay Claims
January 24, 2018 —
Wally Zimolong - Supplemental ConditionsMuch of the Eastern United States is just now emerging from a historic two week cold snap. In much of the Northeast and Mid-Atlantic, the temperature stayed below freezing for 15 days straight. Cities recorded the lowest temperatures in a quarter century. Winter Storm Grayson reeked havoc along the Eastern Coast bringing snow to places like Charleston and a crippling blizzard to Boston.
The record cold snap also impacted the construction industry. Delivery delays, the inability to apply weather sensitive applications (like cast in place concrete), and the unavailability of labor are just a few things that extreme weather can cause on a construction project. If they happen at the wrong time, delays can destroy project schedules and make previous delays even worse. Delays cost money and can mean the difference between a profitable project from both the owner and contractors perspective.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Are You a Construction Lienor?
November 15, 2017 —
David Adelstein - Florida Construction Legal UpdatesWhen it comes to construction lien rights, not everyone that touches the project is a proper lienor. Forget about timely serving a Notice to Owner or recording a claim of lien, if you are not a proper lienor, it does not matter if you properly perfected your lien rights. If you are not a proper lienor, you have NO lien rights under the law!
Florida Statue s. 713.01(18) defines a lienor as follows:
(18) “Lienor” means a person who is:
(a) A contractor;
(b) A subcontractor;
(c) A sub-subcontractor;
(d) A laborer;
(e) A materialman who contracts with the owner, a contractor, a subcontractor, or a sub-subcontractor; or
(f) A professional lienor under s. 713.03;
and who has a lien or prospective lien upon real property under this part, and includes his or her successor in interest. No other person may have a lien under this part.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
Summary Judgment Granted to Insurer for Hurricane Damage
January 24, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe insurer's motion for summary judgment, contending there was no coverage for hurricane damage, was granted. Laurence v. Liberty Ins. Corp., 2021 U.S. Dist. LEXIS 227807 (S.D. Texas Nov. 29, 2021).
When Hurricane Harvey hit, Mike Laurence held a homeowner's policy from Liberty Insurance Corporation and a contractor policy for his business, Pride Plumbing, Inc., issued by State Farm Lloyds. Laurence's property suffered water damage during the storm. State Farm investigated and concluded that all but a small amount, within the policy's deductible, was from flood damage and excluded. Laurence sued.
The property covered by the State Farm policy included Laurence's home, Pride Plumbing's office and two sheds. Pride Pluming did not own or lease any of the buildings on the property. Laurence testified in his deposition that the only damage to his property not caused by flood water was to three buildings from fallen tree limbs and equipment from his business.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com