Joe West Company

Contractors

Contractors

Contacts:
Tim Driskill
Bob Turner
Bill Johnson
Barry Tims
918-660-0090

Our construction services group specializes in meeting the needs of contractors. Whether you need insurance coverage or contract bonds, Our contracting experts can put together a package to suit your needs.

We offer contractors the following products:
  • General Liability Coverage
  • Workers Comp Insurance
  • Equipment Insurance
  • Contract Bonding
  • Auto/Fleet Coverage

We can review your current coverages, assess your exposure, and put together a package that minimizes your exposure in order to protect you from financial loss. Regardless of your size, from one-man operations to large contractors, we can put together a plan that works for you.

If you would like one of our experts to review your current coverage with you to assess your current risk level and to see if we can offer a more comprehensive and cost effective policy, contact us here.


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Specialty contractors are not completely covered for loss exposure unless the operations are covered by Contractors Pollution and Professional Liability.

Coverage is provided for two types of risk:  Design-Build Contractors and Pollution Cleanup Contractors.

Typical contractors will include:

  • Agency Construction Management
  • Landscape Architecture
  • Architecture & Management Consulting
  • At-Risk Construction Management
  • Machinery/Equipment Design
  • Chemical Engineering
  • Marine Engineering
  • Civil Engineering
  • Mechanical Engineering
  • Electrical Engineering
  • Oil/Gas Well Engineering
  • Environmental Engineering
  • Nuclear Engineering
  • Forensic Engineering
  • Process Engineering
  • HVAC Engineering
  • Soils/Geotechnical Engineering
  • Laboratory Testing
  • Structural Engineering
  • Land Surveying

For a no obligation quote, contact one of our Construction contacts today.


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Chinese Drywall: Builders, Subs Face Huge Uninsured Losses

By: John Sadler

General liability carriers specializing in contractor insurance for builders and drywall subcontractors (subs) are "sweating it out" over the potentially massive claims dollars that could be paid out in litigation, settlement, and adverse jury verdicts arising from Chinese drywall.

However, due to the impact of little known policy exclusions and evolving case law in many states, general liability carriers may escape liability for all or a significant percentage of claims leaving builders and trade subs facing huge uninsured losses and potential bankruptcy.

From the point of view of the homeowner, these claims will not likely be covered by homeowner's property insurance. And unfortunately to the extent that the damages are not covered by the general liability policies of builders, subs and distributors, homeowners will incur devastating out-of-pocket losses.

Per House Damage Could Be Astronomical


There is a lot at stake for all parties because the damages on a per house basis are likely to be
astronomical. The lawsuit papers will allege that the fumes from the defective Chinese drywall have resulted in corrosion damages to all metal parts of the house including electrical systems, copper piping, HVAC and other metal fixtures.

In addition, lawsuits will alleged that the nonmetal parts of the house have been damaged by foul-smelling and noxious sulfur dioxide fumes.

Some experts may claim that the drywall can be sealed, but this approach is questionable and unlikely to be accepted by homeowners. Most lawsuits will likely ask for the total removal and replacement of all drywall and electrical systems, as well as other building materials that may have been contaminated by the fumes.

Next, add damages for remediation or replacement to household contents for exposure to corrosive and foul-smelling fumes. Top this off with the possibility of bodily injury claims due to adverse health consequences to occupants due to exposure.

Pollution Liability Exclusions

All contractor general liability policies include a standard exclusion for liability arising from the "actual, alleged or threatened discharge, seepage, release or escape of pollutants." Pollutants are defined as any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Based on this broad definition, the carriers will take the position that the fumes released from Chinese drywall fall under the policy definition of pollution.

Fortunately, the standard policy language includes an exception to the exclusion for pollution that
results from the products or completed operations of an insured. In other words, the insurance carrier can't use the pollution exclusion to deny a claim when the pollution arises after the house has been sold.

Unfortunately, many general liability policies that are sold to contractors include a total pollution exclusion that does not allow the exception that is mentioned in the above paragraph. The presence of the total pollution exclusion (or similar exclusion) on a policy will allow the insurance carrier to take the position of denial of all damages and legal defense. The success of such a position will be determined by the allegations in a specific lawsuit, as well as case law. The successful use of the total pollution exclusion, if upheld by the courts, will have a devastating impact on all defendants.

Property Damage Exclusions and Emerging Case Law

In the event that the total pollution exclusion is not present on the general liability policy, or if it is not ultimately upheld by the courts, claims adjusters will have a fallback position in their quest to deny a significant percentage of Chinese drywall claims.

As a result of the construction defect crisis, most general liability carriers specializing in builders
insurance began to insert special policy exclusions around five years ago to escape liability for
construction defect claims.

The most common exclusion entitled, "Exclusion: Damage To Work Performed By Subcontractors On Your Behalf" (CG2294), virtually eliminates all property damage liability for damage to the builder's faulty work itself (drywall) and resulting damage to the builder's non-faulty work (corrosion to electrical systems, copper piping, HVAC and other metal fixtures).

Existing case law in many states has resulted in claim denials for construction defect under the theory that property damage to a builder's work is not considered to be an "occurrence" or accident, and thus the policy should not act as a warranty. Therefore, the result in these states is the same as the application of exclusion CG2294.

However, general liability coverage under the builder's insurance policy will still likely apply to property damage to contents and bodily injury claims by occupants. Because most lawsuit papers are likely to allege at least some covered damages, coverage will still be triggered for the entire legal defense for all claims at the expense of the insurance carrier.

As concerns drywall subcontractors, their general liability policies will not cover property damage to their work (drywall) but will cover resulting property damage to other parts of the house and contents. Their policy will also cover bodily injury to occupants. In addition, their policy will likely trigger a full legal defense of all claims.

Assuming that both the builder and drywall sub have general liability insurance in force continuously from the completion of the job to the filing of the lawsuit papers, their combined policies won't likely cover the cost to tear out and replace the drywall. Such a repair job represents a huge undertaking and will be very expensive.

U.S. Suppliers and Chinese Manufacturers

U.S. suppliers of Chinese drywall will undoubtedly participate in these lawsuits with both builders and drywall subs. Plans for class action lawsuits are already under way. Under a worst case scenario, some U.S. suppliers may run out of general aggregate limits under their general liability policies, and it is unlikely that Chinese manufacturers will share in these claims due to the difficulties in enforcing judgments against foreign manufacturers.

Builders Can Protect Themselves

Builders are advised to protect themselves from future construction defect and pollution claims by implementing the following practices:

  • Implement mandatory subcontractor agreements with all subs, including insurance    requirements for general liability, hold harmless/indemnification provision, and a requirement for all subs to participate in arbitration proceedings.
  • If the builder's general liability policy includes the Exclusion-Damage To Your Work Performed By Subcontractors On Your Behalf (CG2294) or a similar exclusion, find out if the insurance carrier provides a buyback for an additional premium charge.
  • Ask the insurance agent if any insurance carriers are available that don't use exclusion CG2294 or have a less severe version that covers resulting property damage to the builder's non faulty work.
  • Purchase a pollution liability policy.
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The Line between Legal Vulgarity and Illegal Harassment

Written exclusively for Chubbworks

A federal judge rejected a motion to dismiss a sexual harassment lawsuit, clearing the way for an EEOC suit to proceed to trial. The employer/defendant claimed that the comments that form the basis of the complaint were neither “severe” nor “pervasive” enough to constitute illegal sexual harassment. “Court Rules EEOC Suit can Proceed to Trial against SkyWest Airlines,” www.tradingmarkets.com (June 29, 2009).

The lawsuit charges that three female employees suffered sexual harassment in their workplace due to a series of sexually offensive comments directed to them by a co-worker. Between six and eight remarks were made to each woman, including the co-worker’s statement that “he wished he could put his mouth on her breasts” and “that he wanted to have sex with her and get between her thighs.”

In rejecting the employer’s motion to dismiss, the court stated that a reasonable jury “could find [the] comments to be ‘uninvited sexual solicitations’ and ‘obscene language’ rather than merely vulgar banter.”

The judge applied the analysis of actionable and non-actionable sexual harassment set out by the U.S. Court of Appeals for the Seventh Circuit when he wrote,

On the one side lie sexual assaults, other physical contact, whether amorous or hostile, for which there is no consent express or implied; uninvited sexual solicitations; intimidating words or acts; obscene language or gestures, pornographic pictures. On the other side lies the occasional vulgar banter, tinged with sexual innuendo, of coarse or boorish workers.


Commentary and Checklist

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based sex and, by extension, sexual harassment. Courts quickly defined some actions as sexual harassment, such as demands for sex in return for employment opportunities and forced sexual activity.

However, in the beginning courts split on whether sexual harassment existed if a person’s work
environment became “hostile” due to sexual intimidation and innuendo or offensive remarks of a sexual nature. In 1986, the Supreme Court ruled in the case of Meritor Savings Bank v. Vinson that Title VII also prohibits hostile or intimidating environment harassment.

Courts are still debating at what point actions and remarks cross the line from vulgar and in poor taste to sexual harassment. To make this determination, courts apply a two-prong test: Was the behavior “unwelcome” by the recipient? And was the behavior “severe” or “pervasive” enough to create a hostile work environment in the opinion of a reasonable person.

Certainly, juries may differ on whether a particular set of circumstances rises to the level of sexual harassment or not. However, the best practice for supervisors is to avoid personal behavior or comments that are questionable and to promote a professional atmosphere in the workplace.

Promoting professional behavior in the workplace involves discouraging behavior that is vulgar or undermines the importance of a person or his or her contribution. Here are some other tips for managers to lead in a way that encourages a harassment-free work environment:
  • Lead by example and don’t make crude remarks or jokes.
  • Don’t wear sexually provocative or crude clothing or jewelry.
  • If you are wondering whether behavior or comments are acceptable, then more than likely they are not.
  • If you spot someone being disrespectful or using foul language, admonish him or her quickly and in private.
  • Listen to how employees talk about other employees. Crude behavior is often done in private.
  • When employees complain of inappropriate behavior, take note and report it immediately to your human resources department.
  • Never retaliate against an employee for reporting harassing behavior or other forms of misconduct.

This informational piece is part of “The Loss Prevention Journal” published on September 24, 2009. Joe West Company places Employment Practices Liability as stand alone coverage or as part of a Directors & Officers coverage through a variety of “A” rated carriers for publicly traded, privately held corporations and non-profit organizations.

For more information on Employment Practices Liability, visit with our contacts.

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BUILDERS NEED INSURANCE PROOF

By: Richard Mize
The Oklahoman

A State law is now in effect requiring counties, cities and towns that issue building permits to get proof that the applicant has Worker's Compensation and General Liability insurance.

The following is from a question-and-answer session about the law with Bill Cassetty of HC Homes in Bixby, the president of the Oklahoma State Home Builders Association.

Q: What is the new law's benefit to home buyers?

A: Several contractors are not licensed under the (state) Construction Industries Board. Any legitimate contractor will have this insurance. Homebuyers and those having work done on their property can rest easier knowing their contractor is legitimate. But, just because a contractor has insurance doesn't make them the best. A consumer still needs to do his homework. Get references and check them. How long have they been in the business? An
important indicator of their veracity is membership in a trade association such as the Central Oklahoma Home Builders Association, Home Builders Association of Greater Tulsa or one of the other 11 home builder associations throughout the state.

Q: What is the benefit to home builders?

A: Everyone is now on a level playing field. Before, the association members were at a small disadvantage due to the other guy not having insurance and thus, his overhead was lower. We felt our advantage was our professionalism and the education we offer. If the buyer was only interested in price, we lost.

Q: Who will make sure that cities, counties and towns actually make sure permit applicants are insured? How?

A: The Oklahoma Municipal League and the communities are putting a plan in place. Since cities are autonomous, enforcement will take different paths. We already know some cities require registration - Del City and Norman, for example - while other cities will require proof each time you apply for a permit.

Q: What about areas in the state where building permits are not required? Why didn't the Oklahoma State Home Builders Association push for a requirement that all builders carry insurance whether or not a permit is required?

A: There is no way to enforce it without licensing, which we did push for legislatively a few years ago and no doubt will again. Currently, enforcement fits best at the permit level.

Q: Will this stop "fly-by-night" contractors?

A: No, there will still be some who will get their permit and then drop their insurance, similar to what happens with car tags. But it is a step in the right direction. Also, there are still many areas where building permits are not required or some work doesn't require a building permit. It will still be vital for the consumer to do his homework.

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Terrorism Remarks Lead to Religious Discrimination Settlement

Written exclusively for Chubbworks

 
An equipment rental employer agreed to settle a religious harassment lawsuit just days before it was scheduled to go to trial. The employer will pay over $64,000 in compensatory damages and provide other remedial relief. "Sunbelt Rentals to Pay Damages to Muslim Worker Harassed Due to Islamic Religion," www.eeoc.gov (Oct. 16, 2009).

A Muslim employee claimed that he suffered harassment based on his Islamic faith. He was subjected to derogatory comments and slurs about his religion and endured comments suggesting he was a terrorist because he was Muslim.

In adding to the monetary settlement, the employer agreed to provide anti-discrimination training to its staff at the location where the employee works and post a notice about the settlement. The employer must also stop any religious harassment and report any complaints of religious harassment at that location to the Equal Employment Opportunity Commission (EEOC) for monitoring.

Commentary and Checklist

Title VII of the Civil Rights Act of 1964 prohibits discrimination, including harassment, based on religion. Since the terrorist attacks of September 11, 2001, the EEOC has documented a significant increase in religious discrimination charges filed by Muslims and those perceived to be Muslim.

In 2008, the EEOC received 3,273 charges of religious discrimination.

The EEOC suggests the following best practices to prevent religious harassment:

Employers should have a well-publicized and consistently applied anti-harassment policy that: (1) covers religious harassment; (2) clearly explains what is prohibited; (3) describes procedures for bringing harassment to management's attention; and (4) contains an assurance that complainants will be protected against retaliation.

The procedures should include a complaint mechanism that includes multiple avenues for complaint; prompt, thorough, and impartial investigations; and prompt and appropriate corrective action.

Employers should allow religious expression among employees to the same extent that they allow other types of personal expression that are not harassing or disruptive.

Once an employer is on notice that an employee objects to religious conduct that is directed at him or her, the employer should take steps to end the conduct because even conduct that the employer does not regard as abusive can become sufficiently severe or pervasive to affect the conditions of employment if allowed to persist in the face of the employee's objection.

If harassment is perpetrated by a non-employee assigned by a contractor, the supervisor or other appropriate individual in the chain of command should initiate a meeting with the contractor regarding the harassment and demand that it cease,  that appropriate disciplinary action be taken if it continues, and/or that a different individual be assigned by the
contractor.

To prevent conflicts from escalating to the level of a Title VII violation, employers should immediately intervene when they become aware of objectively abusive or insulting conduct, even absent a complaint.

Employers should encourage managers to intervene proactively and discuss with subordinates whether particular religious expression is welcome if the manager believes the expression might be construed as harassing to a reasonable person.

While supervisors are permitted to engage in certain religious expression, they should avoid expression that might - due to their supervisory authority - reasonably be perceived by subordinates as coercive, even when not so intended.


This informational piece is part of "The Loss Prevention Journal" published on October 27,
2009.

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Bullying and Stress - What Your Organization Can Do

A recent survey conducted by the U.S. Workplace Bullying Institute reveals instances of bullying are becoming worse in the workplace. Nonverbal intimidation is the most prominent tactic used, followed by falsely accusing someone of errors that he or she did not actually make. Ben L. Teehankee, “Workplace Bullies,” Business World Online (Oct. 29, 2009).

Additional findings from the Workplace Bullying Institute note other workplace bullying tactics frequently used. They include:
  • Staring or glaring at others in a way that is clearly hostile;
  • Discounting a person’s thoughts or feelings in a meeting; 
  • Using the “silent treatment” to isolate co-workers; and
  • Exhibiting uncontrollable mood swings in front of a group of people.
Commentary

According to Elizabeth Blackburn, a biochemist at the University of California, San Francisco and 2009 Nobel Prize recipient in physiology and medicine, there is a connection between stress and aging on a cellular level. Long-term exposure to stress, like being bullied at work, leads to accelerated aging through premature cell death.

The National Institute for Occupational Safety and Health (NIOSH) recognizes job stress as an area growing concern in occupational safety and health fields. Job stress can trigger various stress–related disorders including depression, anxiety, dissatisfaction, fatigue, tension, aggression, lack of concentration and memory problems.

One way job stress can occur is when the job demands and the capabilities of the worker are a poor match. In the case of workplace bullying, workers may not be able to meet the demands of the job because of the emotional toll bullying takes on them.

Employers wishing to curtail bullying must create an atmosphere where bullying is not accepted and a means for employees to report bullying without fear.

This informational piece is part of “News to Use” published on November 10, 2009.