OSHA Launches Program to Combat Trenching Accidents
October 16, 2018 —
Tom Ichniowski – Engineering News-RecordIn the wake of a recent rise in fatal trenching cave-ins, the federal Occupational Safety and Health Administration has begun a targeted education and enforcement program to try to reverse the trend.
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Tom Ichniowski, ENRMr. Ichniowski may be contacted at
ichniowskit@enr.com
Exclusion Does Not Bar Coverage for Injury To Subcontractor's Employee
April 28, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe Third Circuit reversed the district court and held that the additional insured was covered for injury to the subcontractor's employee despite an employee's exclusion in the policy. ArcelorMittal Plate, LLC v. Joule Technical Serv, Inc., 2014 U.S. App. LEXIS 2905 (3d Cir. Feb. 18, 2014).
ArcelorMittal Plate, LLC (AMP) owned a steel production facility. AMP contracted with Joule, an industrial staffing and engineering firm, for regular performance of maintenance and repair work at its plant. Joule was obligated to provide a CGL policy adding AMP as an additional insured "for all claims including, but not limited to, claims by Joule's employees."
Joule added AMP as an additional insured to its policy with Liberty Surplus Ins. Corp. The policy had an "employee exclusion" which stated, “This insurance does not apply to bodily injury to (1) an employee of the insured arising out of and in the course of (a) employment by the insured or (b) performing duties related to the conduct of the insured's business.”
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Federal Interpleader Dealing with Competing Claims over Undisputed Payable to Subcontractor
September 28, 2017 —
David Adelstein - Florida Construction Legal UpdatesWhat do you do if you are holding undisputed money owed to a subcontractor? Well, you make an effort to pay it or tender it! Right? I am never a fan of a client holding undisputed sums without a legitimate contractual basis.
There are circumstances, however, where the effort to pay an undisputed payable is not so easy. In fact, it is challenging, as in the below case example where the subcontractor filed for an Assignment for the Benefit of Creditors (referred to as an “ABC”). An ABC, in a nutshell, allows an insolvent entity to file an insolvency action in state court governed by state law and choose its assignee (versus a federal bankruptcy action governed by federal law where a trustee is appointed). One major difference is that there is no automatic stay in an ABC as there is in a federal bankruptcy action. Thus, the insolvent entity can still be sued, but, while that entity is in an ABC, there are many creditors that will not be able to enforce a judgment. (See Florida Statute Ch. 727).
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
Review of Recent Contractors State License Board Changes
February 27, 2023 —
Alexander Moore - Kahana FeldCalifornia’s Contractors State License Board (CSLB) was established in 1929 to protect California residents through licensing and regulating contractors working in the state. Today, the CSLB licenses approximately 290,000 contractors, utilizing forty-four different classifications. Each licensing classification specifies the type of contracting work permitted by that classification.
The CSLB website (www.cslb.ca.gov) contains a wealth of information for contractors and non-contractor consumers alike. Consumers can use the website’s features to check the history and business information of contractors, searching via license number, business name, or individual name. License applicants can use the website for instructions and forms for the application process. Contractors can use the website for renewals, regulations, and various resources.
One the CSLB’s most important roles is assisting contractors with keeping track of the multitude of state regulations, and periodic changes thereto, that apply to those in the construction trades. The CSLB posts periodic Industry Bulletins which provide helpful guidance and reminders of important construction topics. At year end, the CSLB issues a bulletin to update licensees of the changes to California Law that will become effective on the first of January in the coming year. Below are four of the more interesting and impactful statutory changes.
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Alexander Moore, Kahana FeldMr. Moore may be contacted at
amoore@kahanafeld.com
CISA Clarifies – Construction is Part of Critical Infrastructure Activities
April 20, 2020 —
Brenda Radmacher & Ernest Isola - Gordon & Rees Construction Law BlogAfter ongoing confusion by many over whether construction should be considered part of the “essential business,” during the COVID-19 pandemic, the Cybersecurity and Infrastructure Security Agency (CISA) issued an updated Coronavirus Guidance for America on March 28, 2020 to clarify construction’s critical role in supporting essential infrastructure. CISA’s initial advisory list referenced construction in regard to some areas such as energy and wastewater treatment, but it was unclear as to the whole of the construction industry. CISA’s update clarified that construction activities are included in its list of essential critical infrastructure workers. This new federal guidance should remove the ambiguity that led to varying responses by state and local officials halting some construction. The guidance clarifies that construction and related activities – including the manufacture and supply/delivery of supplies and equipment, permitting, safety, and inspections of projects – are covered as part of the critical infrastructure and economic activities.
The ongoing challenge will be for construction activities to proceed in a way that protects workers and the general public from the spread of coronavirus. However, contractors are always resourceful and have been implementing safety measures effectively on projects with an unwavering commitment to safety and are ready to meet this challenge. In addition to following the guidance from the CDC, we recommend that contractors implement a comprehensive safety program for their employees as well as for all parties that come onto the jobsite. It is critical that contractors have clear a clear plan for communications with their teams to ensure compliance with the CDC recommendations. This should include what has recently become standard protocol or social distancing, not hosting large group meetings and conducting meetings online or via conference call, maintaining a six-foot distance between people, discouraging hand-shaking or other contact, not sharing tools, and sanitizing reusable PPE. Contractors also should also be sure to place safety posters about “How to Protect Yourself” where they can be readily seen and encourage staying home when sick, cough and sneeze etiquette, and hand hygiene at the entrance of a jobsite. We also recommend heightened site security including interviewing anyone coming to the jobsite.
Reprinted courtesy of
Brenda Radmacher, Gordon & Rees and
Ernest Isola, Gordon & Rees
Ms. Radmacher may be contacted at bradmacher@grsm.com
Mr. Isola may be contacted at eisola@grsm.com
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Los Angeles Wildfires Will Cause Significant Insured Losses, Ranking Amongst the Most Destructive in California's History
January 14, 2025 —
Morningstar DBRSWildfires currently burning in the Pacific Palisades, Eaton, Hurst and other Los Angeles neighborhoods will cause significant losses for the insurance industry, in
Morningstar DBRS’ view. The fires have already burned more than 1,100 homes and threaten more than 28,000 additional structures, according to local fire officials. Preliminary estimates point to total insured losses in excess of $8 billion depending on the final number of properties being affected by the wildfires. By way of comparison, the 2018 Woolsey Fire, which destroyed 1,643 structures just north of Los Angeles, caused more than $6 billion in property damages at that time. Morningstar DBRS expects the ongoing wildfires to have a negative but manageable impact on major property insurers active in the Californian market, with the impact somewhat mitigated by their use of reinsurance and their high degree of diversification. Similarly, losses should be manageable for the global reinsurance industry and not affect their credit profiles.
While leading U.S. property insurers are in good financial condition, the California property insurance market has been challenging because of high wildfire and other natural catastrophe risks combined with regulatory restrictions on coverage and pricing, leading many insurers to re-think their product offering, including an outright exit from the market. For example, market leaders such as State Farm and Allstate started reducing their exposure to the California market beginning 2022-2023. It is therefore possible that a larger than usual portion of the losses caused by the wildfires will be uninsured or may be covered under the California FAIR Plan, which is designed to provide fire coverage up to $3 million per home and spread the risk across the industry when it is not available from traditional carriers.
This event reinforces the need for adequate rate increases on home insurance in California, based on forward-looking pricing and catastrophe modelling, as well as for additional fire prevention and mitigation initiatives. However, property insurance affordability is likely to remain a challenge in the state going forward, with many property owners opting to remain uninsured or under-insured because of the high costs.
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More Reminders that the Specific Contract Terms Matter
January 24, 2022 —
Christopher G. Hill - Construction Law MusingsIf there is a theme I have pounded upon here at Construction Law Musings in the over 13 years of posting, it is that the specific terms of your construction contracts will make a huge difference. While there have been reminders galore, a case from the Eastern District of Virginia presented another wrinkle on this theme. The wrinkle? A factoring company.
In CJM Financial, Inc. v. Leebcor Services, LLC et. al., the Court examined this scenario (though it went into more detail than I will here): Leebcorp hired a subcontractor, Maston Creek Services to provide certain construction services under two separate contracts. Maston then hired CJM, a factoring company, and assigned CJM its receivables and the right to collect those receivables. We wouldn’t be discussing this case if all had worked out as planned, so you likely anticipate at least some of what came next. The short story is that Matson failed to pay some of its suppliers and Leebcorp exercised its termination rights under those contracts when Matson refused to cure. In the interim, CJM had paid part of certain payment applications to Matson in compliance with the factoring agreement. When Leebcorp failed to pay CJM for Matson’s work, CJM exercised its assigned rights to collect the receivables and sued Leebcorp for breach of contract. In response, Leebcorp counterclaimed for, among other counts including civil conspiracy, breach of contract based on Matson’s failure to perform. CJM moved to dismiss the counterclaims.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Practical Advice: Indemnification and Additional Insured Issues Revisited
September 08, 2016 —
John P. Ahlers – Ahlers & Cressman PLLC Construction BlogLawyers love writing about indemnification. There are seventeen blog articles on our website alone that deal with the subject. Before you click out of this email in disgust that we are rehashing a stale topic, this post contains some practical advice for contractors and subcontractors dealing with the perplexing issues of indemnification and additional insured provisions.
The concept of indemnity is based on a contractual agreement made between two parties, in which one party agrees to pay for the potential losses or damages caused by the other party. To indemnify someone means to protect that person or entity by promising to pay the cost of possible future damage, loss, or injury. When signing a contract, you should identify the indemnity obligations that could cost your business money. Finding the words “hold harmless” or “indemnify” in a proposed contract is not enough. The terms “hold harmless,” “save harmless,” or “indemnify” are a big part of the indemnification obligation. Although insurance requirements (“additional insured” clauses) accomplish virtually the same thing as very broad, unfair, or unlimited indemnity terms do, they result in an “end run” around the effort to limit the indemnification obligation.
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John P. Ahlers, Ahlers & Cressman PLLCMr. Ahlers may be contacted at
jahlers@ac-lawyers.com
