1. Brian Bries, Area V.P.-Construction Practice Arthur J. Gallagher & Co.
Effective Use of Liability Insurance, Additional Insured Coverage, and Claims Handling Strategies
Brian Bries, Area V.P.-Construction Practice Arthur J. Gallagher & Co.
Tammy Kilty,
All-Bry Construction
Ryan Hiss
Laurie & Brennan, LLP

2. Program Summary Preventative Measures
Best Practices When the Claim Is Made
Monitoring the Claim
Text Questions to

3. Preventative Measures
Contract Clauses
Flow Down Clauses
Indemnification
Limitation of Liability/Damages/
Waiver of Consequential Damages
Warranty Periods/Statute of Limitations

4. Preventative Measures
Insurance
Coordinate requirements of all subcontractors with what is required of you
Require Additional Insured coverage from subcontractors

5. Preventative Measures
Liability Insurance Considerations
Make sure your limitations meet the requirements of the contract
Endorsements
Primary/Non-Contributory
Blanket Additional Insured Forms
Blanket Waiver of Subrogation

6. Preventative Measures
What Do Additional Insured Endorsements Do?
Provide upstream parties with some degree of insurance coverage maintained by downstream parties
Why Do Parties Demand Additional Insured Status?
Greater protection than hold harmless/indemnification agreements
Direct rights under the policy
What Insurance Policies Allow Additional Insured Status?
CGL
Auto
Umbrella/Excess
Builders Risk

7. Preventative Measures
Additional Insured Coverages
ISO AI Forms (and many other manuscript forms)
CG and CG (or equivalent)
11/85 (obsolete) 10/01, 07/04, 04/13
Be aware of manuscript AI coverage forms
Primary, Non-Contributory Policy Language
Follow Form Excess Coverage
IL Horizontal v. Vertical case law
Waivers of Subrogation
WC, GL, Auto, other lines of coverage if applicable

8. Questions: Text

9. Preventative Measures
Very common approach today with no scheduling of names
Usually tied to “written” or “executed” contracts
Breadth of coverage is dependent on the “fine print”
May not provide for “in whole or part”
May not provide completed operations
Often limited to limits or coverages required by contracts

10. Preventative Measures
“…any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.”

11. Preventative Measures
Additional Insured– Where Required By Contract
Who is an Insured is amended to read any person or organization to whom you become obligated to include as an additional insured under this policy, as a result of any contract or agreement you enter into which requires you to furnish insurance to that person or organization of the type provided by this policy, but only with respect to liability arising out of your operations or premises owned by or rented to you.

12. Preventative Measures
Want to Avoid the Following:
The Subcontract agreement was never signed
The Sub submitted an incomplete certificate of insurance
The certificate of insurance and subcontractor AI coverage was never reviewed for compliance with the Subcontract agreement

13. Preventative Measures
Certificate of Insurance Best Practices:
Signed Contracts/Subcontracts with reviewed indemnity and insurance requirements
(PRIOR TO STARTING THE WORK)
Obtain Certificates of Insurance from Subcontractors

14. Preventative Measures
Review for contractual compliance
(PRIOR TO STARTING THE WORK)
Coverage Dates, Limit Requirements, Carrier AM Best Ratings, Review of Specific AI Endorsements, Waivers of Subrogation Endorsements, Primary/Non-contributory Endorsements

15. Preventative Measures
Internal Reporting Policy
The superintendents, project managers, project executives should all have a specific protocol for reporting claims or potential claims.
Document Retention Policy
Document hold placed upon all project files: s, letters, notes, diaries, accounting records, contracts, shop drawings, design drawings, calculations, change order requests, payment applications, payment receipts.

16. Questions: Text

17. After Claim Has Been Made
Contact Claims Team (in-house and outside consultants)
Activate Documentation Retention Policy
Investigate
Interviews
Critical Document/Evidence Gathering
Non-party contact information
Contract Term Review (obligations to repair/warranty/claims period)

18. After Claim Has Been Made
Demand Repairs/Warranty Work
Check contract requirements
Notice of Claim to Insurance Carriers
Your Insurance
Additional Insured Carriers
Considerations: deductible expense, loss run, insurance premiums

19. After Claim Has Been Made
Reservation of Rights Letters
Conflict of Interest
Claim exceeds policy limits
Gives Contractor Option of Hiring Its Own Counsel At Insurance Company’s Cost

20. After Claim Has Been Made
Monitoring Claim During Litigation or Arbitration
Establish point of contact for all communications
Require reports from attorneys- at least quarterly
Require phone call strategy sessions with in-house team
Require copies of court pleadings and orders

21. Contact Information
Brian G. Bries, Area VP – Construction
Arthur J. Gallagher & Co.
(630)
Ryan Hiss, Construction Lawyer
Laurie & Brennan, LLP
(312)