In 2012, the most recent year for which data is available, the United States Bureau of Labor Statistics reported 849 construction worker fatalities. Crane accidents make up a large number of these deaths and an even greater number of construction-related injuries each year. Not only can a crane accident cause significant injury to workers on a construction site, but it can also cause injury and death to innocent passersby of the site. Given the risk associated with crane operation on a construction site, what should you – owners and contractors – do to mitigate this risk and limit your exposure?
There are generally three reasons why a construction crane could topple: improper design of the crane itself; incorrect use; and improper set up and maintenance of the crane. The first two reasons are usually covered by either products liability coverage of the manufacturer, or the general liability policy of the construction manager or crane operator (means and methods). An examination of recent catastrophic crane collapses in large cities brings attention to an often neglected type of insurance: professional liability insurance for contractors. Significant losses, depending on the specific circumstances, could impact either a contractor’s general liability or professional liability policy. Professional liability insurance limits the contractor’s liability as a result of this type of construction-site accident.
Construction contracts typically assign the liability of the engineer or architect for the design, and the liability of the contractor for the execution of the construction work, which is considered a professional service. In our example of a crane collapse, if the contractor is responsible for designing the foundation the crane will be set on, these activities can be considered professional services and excluded from the general liability by endorsement. However, there are also endorsements which can be added to provide additional protection for the contractors, such as CG 2280, that will address exposures during design-build projects. An examination of the incident will determine if the proximate cause of the loss falls under means and methods or design error. In all cases, it is important that the contractor’s general liability and professional liability policies dove-tail, so that there are no gaps between the two coverages which may leave an uninsured gap.
Given the size and power of construction equipment, the potential for injury at work sites, particularly due to operations utilizing cranes and other heavy equipment without proper planning and safety procedures, is tremendous. Crane accidents, like all heavy equipment accidents, can have a disastrous impact on the injured worker, his or her family, as well as the contractor responsible for the accident.
For a contractor, enlisting a third-party risk consultant skilled in construction-related risk mitigation and navigating construction contracts, agreements and insurance policies can prove immensely valuable in protecting the contractor and his business in the event of a work site accident.
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