Hamilton, NJ, December 03, 2014 --(PR.com
)-- Jeff Slivka, chief operating officer and executive vice president, and Tim Farrell, senior vice president, at New Day Underwriting Managers LLC, a leading resource for construction-related professional liability and environmental insurance agents and brokers, recently helped hundreds of industry professionals, including owners and developers, sort through the latest liability trends, risks and costs confronting their businesses at the 34th IRMI Construction Risk Conference in Nashville, Tennessee.
During the session titled “Insuring Project Owners' Professional Liability Risks,” Slivka detailed the numerous liabilities ranging from the collapse of parking garages to surveys errors that are currently plaguing an industry that has experienced an approximate 30 percent increase in construction-related professional liability claims over the past year alone. This included reviewing the various non-insurance alternatives for managing professional liability risks on construction projects as well as identifying multiple insurance options including Owners Protective Professional (OPP) terms and coverages available through leading carriers.
“The boundaries are constantly shifting in today’s commercial construction marketplace resulting in new layers of risk that could leave the unprepared very vulnerable to all forms of problems,” says Slivka. “In years past, there was a clear demarcation between the responsibilities of all the players. These lines no longer exist. Owners are demanding more of contractors, who are being asked to consult on projects earlier than ever before and in areas beyond their expertise. LEED certification is becoming a consistent demand. Products unproven in new applications are being used with disastrous results. Unfortunately, many project owners also fail to realize that they retain the ultimate responsibility for design errors when problems arise.
“This workshop provided an ideal forum for navigating through the clutter and formulating informed decisions designed to protect against the risks. The goal was to help these individuals do what they do best, while instituting the appropriate strategies that will shield themselves, employees, partners and stakeholders from potential disasters.”
According to Slivka, many of his audience’s questions centered on the (OPP) insurance marketplace and its increasing role in providing owners with first-party indemnity and additional defense expense protection resulting from the negligent acts, errors and/or omissions committed by the design professionals they hire. “Eight carriers now offer this program, which continues to gain interest from owners searching for a cost effective method for insuring themselves against catastrophic loss,” adds Slivka. “OPP is also a very undersold and under-purchased product that was specifically developed to supplement rather than replace the design professional’s professional liability limits with additional coverage available to project owners. Purchased prior to the start of construction projects, it is ideal for protecting large, private owners from catastrophic design errors in projects costing between $250 million and $1 billion.”
In addition, Farrell hosted a table discussion on “Contractors Professional Liability (CPrL): Closing the Coverage Gap” during the conference’s annual Construction Café. This session highlighted both the “obvious and not so obvious professional exposures” related to issues like value engineering, subcontractor selection, site supervision, constructability reviews, opinions and recommendations. This included comparing and contrasting the professional liability coverages of carriers, the role of negligence in triggering claims and the methods for protecting contractors from uninsured and under-insured design professionals with excess coverage.
“Our discussion was dedicated to helping retail brokers, underwriters and insureds better understand CPrL benefits and the damages that can arise through the work of designers, construction managers and/or specialty contractors,” explains Farrell. “'New and improved' CPrL forms are continually being introduced with supplemental coverages for crisis management, Building Information Modeling (BIM), disaster response and corporate reputation. As a result, it is extremely important for our business partners and their contractor clients to become far more educated on the new set of challenges that continue to evolve in the changing construction workplace and the value of CPrL to help mitigate those risks.”
Among the many points addressed by Farrell during his session surrounded the:
- Growing prevalence of rectification or mitigation of loss (MOL) coverage, which enables contactors to take corrective action when recognized design errors are found mid-project as well as receive the necessary reimbursement needed to correct problems that can otherwise result in professional liability claims
- Need to immediately and properly report any form of circumstance that could lead to a claim
- Limitations of Liability provisions between contractors and design professionals and their subsequent impact on protective coverages
For more information on New Day Underwriting Managers please call 609-298-3516 or visit www.newdayunderwriting.com.
About New Day Underwriting Managers LLC
New Day Underwriting Managers LLC is a specialty resource for agents and brokers, assisting them and their clients find appropriate, high-quality environmental and construction-related professional liability insurance coverages. The company offers agents and brokers single-point access to an ample portfolio of products and services provided by the nation's largest environmental and professional liability insurance providers. More information about the company is available on their website at www.newdayunderwriting.com.