Insurance Policy to Protect Hawaii's Coral Reefs
December 26, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe New York Times recently reported on an insurance policy issued to the non-profit Nature Conservancy to protect coral reefs in Hawaii. Cihistopher Flavelle, Catrin Einhorn, In a First, Nonprofit Buys Insurance for Hawaii's Threatened Coral Reefs, N.Y. Times, Nov. 21, 2022.
If damaged by a storm, coral reefs need immediate attention if they are going to recover. The Nature Conservancy plans a four step process to save damaged reefs:
- Purchase a policy for all 400,000 acres of coral reefs surrounding the Hawaii island.
- If reefs are sufficiently damaged by a storm the policy will pay out within two weeks.
- The Nature Conservancy will ask the State of Hawaii, owner of the reefs, for a permit to repair the storm damage.
- Finally, if the state officials issue the permit, the insurance proceeds will pay teams of divers to repair the damage. Crews will have about six weeks before coral begins to die.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Engineer Proposes Slashing Scope of Millennium Tower Pile Upgrade
January 03, 2022 —
Nadine M. Post - Engineering News-RecordBased on further structural analysis and the success of a pilot program that installed three permanent piles using modified procedures, the structural engineer-of-record for the delayed perimeter pile upgrade of the 645-ft-tall Millennium Tower in San Francisco has proposed a significantly reduced scope for the project that he says would still arrest settlement and allow the slow recovery of some of the condominium building’s tilt.
Reprinted courtesy of
Nadine M. Post, Engineering News-Record
Ms. Post may be contacted at postn@enr.com
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Surety Trends to Keep an Eye on in the Construction Industry
March 25, 2024 —
Oliver Craig - Construction ExecutiveReflecting on the dynamics of the 2023 construction and surety industries, it is evident that opportunities and challenges have emerged for contractors that will shape the landscape for the year ahead. Contractors can not only capitalize on these trends but protect the successful companies they have already built.
PROJECT OPPORTUNITIES
There has been a notable increase in public works opportunities, driven by increased government spending and the aging infrastructure in the United States. This trend is expected to continue in 2024 and beyond, with a notable portion of work coming in transportation- and public-utility-related infrastructure.
Due to increased spending, many contractors are reporting historically high backlogs—and that often includes the largest project their company has contracted in their history. While increased spending presents more opportunity, it’s critical contractors be even more diligent about new opportunities, giving additional consideration to the following:
Job Selection: New geographies, scope, project owners and/or subcontractor relationships commonly come with a learning curve. With the current state of the market, it’s not the ideal time to be learning costly lessons. Contractors should focus on having a proactive go/no-go strategy when reviewing potential projects to identify risks early and plan accordingly.
Reprinted courtesy of
Oliver Craig, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Balancing Risk and Reward: The Complexities of Stadium Construction Projects
April 15, 2024 —
Gregory A. Eichorn - Peckar & Abramson, P.C.From grand designs to opening day, stadium construction projects present a captivating blend of high-profile opportunities and significant challenges and risks. Navigating this complex landscape is not easy, but when managed properly, the potential rewards, both in terms of reputation and finances, can make it a gamble worth taking. While each stadium project is different, some of the more common risks include:
- Securing adequate labor, materials and equipment based on the size of the project;
- Logistical concerns regarding the concurrent performance of multiple trade scopes on a single site;
- Protection of work in place from weather due to the large footprint of the stadium project;
- Cash flow issues caused by protracted change order processing, conflicting and/or onerous payment requirements from project financing entities, and reimbursement of considerable monthly general condition costs; and
- Meeting the schedule requirements for the project.
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Gregory A. Eichorn, Peckar & Abramson, P.C.Mr. Eichorn may be contacted at
geichorn@pecklaw.com
Occurrence Found, Business Risk Exclusions Do Not Bar Coverage for Construction Defects
May 13, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe court determined that the supplier of cement for the construction of pools had coverage for alleged construction defects in the finished pools. Harleysville Worcester Ins. Co. v. Paramount Concrete, Inc., 2014 U.S. Dist. LEXIS 43889 (D. Conn. March 31, 2014).
R.I. Pools sued Paramount, a manufacturer and supplier of shotcrete, after cracking appeared in nineteen pools built by R.I. Pools using Paramount's shotcrete. The jury awarded R.I. Pools compensatory damages of $2,760,000.
Paramount's insurer, Harleysville, defended under a reservation of rights. After the verdict, Harleysville filed for a declaratory judgment that there was no coverage under the CGL policy. Paramount filed for partial summary judgment.
Harleysville first argued there was no occurrence. The policy's definition of occurrence included the phrase, "continuous exposure." This broadened the term "occurrence" beyond the word accident to include a situation where damage occurred over a period of time, rather than suddenly or instantaneously.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Avoiding Disaster Due to Improper Licensing
February 18, 2019 —
Candace Matson - Construction & Infrastructure Law BlogIT’S NOT ENOUGH FOR A CONTRACTOR TO BE LICENSED . . . it must be properly licensed.
We are reminded of this by the recent case of JMS Air Conditioning and Appliance Service, Inc. v. Santa Monica Community College District, Bernards Bros., Inc., 30 Cal. App. 5th 945 (2018). In that case, JMS entered into an $8.2M subcontract with Bernards to install an HVAC system in a new facility being built for the District. JMS held a C-20 warm-air heating, ventilating and air-conditioning license. A year into the project, Bernards sought permission from the District to substitute another subcontractor for JMS (as required under Public Contract Code Section 4107 for listed subcontractors on public works of improvement). Among other things, Bernards contended that JMS was not properly licensed to perform that portion of the work which consisted of hydronic plumbing and hydronic boiler work. JMS countered that this work was an integral part of installing an HVAC system, and relied on Business & Profession Code Section 7059, which permits work that is “incidental and supplemental to the performance of the work for which the specialty contractor is licensed,” and a California State Licensing Board regulation which defines “incidental and supplemental” as meaning “essential to accomplish the work in which the contractor is classified.” (Cal. Code Regs., tit. 16, §831.)
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Candace Matson, Sheppard MullinMs. Matson may be contacted at
cmatson@sheppardmullin.com
Florida Self-Insured Retention Satisfaction and Made Whole Doctrine
March 11, 2014 —
Scott Patterson – CD CoverageIntervest Construction of Jax, Inc. v. General Fidelity Insurance Co., * So.2d * (Fla. 2014), the issue was whether the insured general contractor could satisfy the SIR in its CGL policy with funds it received from the insurer of a subcontractor in settlement of the general contractor’s contractual indemnity claim against that subcontractor. ICI was the general contractor for a residence sold to Ferrin. Several years after completion, Ferrin suffered injuries in a fall while using attic stairs installed by ICI’s subcontractor Custom Cutting. Ferrin sued ICI but not Custom Cutting. ICI was insured by General Fidelity with a $1M SIR. ICI sought contractual indemnity from Custom Cutting. The Ferrin suit was ultimately settled for $1.6M. Custom Cutting’s CGL insurer paid $1M to ICI to resolve ICI’s contractual indemnity claim. Using the $1M paid on behalf of Custom Cutting and $300K of its own funds, ICI paid $1.3M to Ferrin. General Fidelity paid the remaining $300K with an agreement with ICI that each was entitled to seek reimbursement of $300K from the other. ICI filed suit in Florida state court. General Fidelity removed to federal court. The Eleventh Circuit certified the relevant questions to the Supreme Court of Florida.
The Florida Supreme Court first held that the General Fidelity SIR allowed ICI to satisfy the SIR through indemnification payments received from a third party. While the SIR provision stated that it must be satisfied by the insured, it did not include any language proscribing the source of the funds used by the insured to satisfy the SIR. The court distinguished other decisions where the SIR endorsement expressly stated that payments by others, including other insurers, could not satisfy the SIR. The court also relied on the fact that ICI “hedged its retained risk” by paying for its entitlement to contractual indemnification from its subcontractor years prior to purchasing the General Fidelity policy.
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Scott Patterson, CD Coverage
Wyoming Supreme Court Picks a Side After Reviewing the Sutton Rule
January 16, 2024 —
Ryan Bennett - The Subrogation StrategistIn a matter of first impression, the Supreme Court of Wyoming (Supreme Court), in West American Insurance Company v. Black Dog Consulting Inc., No. S-23-0052, 2023 WY 109, 2023 Wyo. LEXIS 111, examined whether a landlord’s insurer could pursue a subrogation claim against a tenant who caused a fire loss. The Supreme Court, applying a case-by-case approach, found that the insurer could not subrogate against the tenant.
West American Insurance Company (West) insured Profile Properties (Profile), which owned commercial property in Cheyenne, Wyoming. Black Dog Consulting Inc., d/b/a C.H. Yarber (Yarber) leased commercial space from Profile where it operated a metal fabrication business. The lease agreement between Profile and Yarber required Yarber to pay the full expense of Profile’s blanket insurance policy, which included general commercial liability insurance and fire and extended coverage insurance on the building.
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Ryan Bennett, White and Williams LLPMr. Bennett may be contacted at
bennettr@whiteandwilliams.com