Posts Tagged ‘wrap insurance’

Extreme Photoshopping

November 29, 2011

Interesting coverage in today’s NY Times about legislation in Europe and proposed in the US about labeling photos that have been highly re-touched to the point where the appearance of the subject has been substantially altered.

In the case of a single photo, it’s next to impossible for the naked eye to detect a professional retouch. However, in our world of construction photography, we rarely deal with a single make-or-break photo. In cases where photographic evidence exists, there are often many photos from many different cameras that show the same subject. Anyone who is inclined to modify a photo in their favor, better plan on hunting down all of the other photos as well if they hope to succeed.


Eliminating the Risk of the Past

November 9, 2011

Why do construction budgets need contingencies?

There are many facets to the answer but they boil down to two; the risk of the future and the risk of the past. While there are many things we can do to mitigate the risk of the future, it is a fact of life. Weather will change, buildings will leak and misunderstandings will continue. However, effectively eliminating the risk of the past is well within our reach.

What is the risk of the past?

It’s the decay of knowledge over time. As knowledge decays, uncertainty rises and our ability to make informed decisions suffers. Certain facts blur into vague recollections raising doubts and costs in the process.

How do we eliminate the risk of the past?

By recording the present, of course! Photos, video, sound and written notes are all key components of capturing the existing conditions on a site. The more facts we capture surrounding an event or condition, the more accurately we can examine it at a later date.

How does eliminating the risk of the past effect the construction contingency?

The right photo can eliminate the need for hundreds of hours of discovery, depositions and expert testimony.  Claims about sidewalk damage, impaired access or performance milestone melt away in presence of irrefutable evidence.

In my next post, we’ll take a look at the effects of reduced risk of the past on a contingency budget.

4 Steps To Maximize Insurance Coverage for Construction Defects

April 15, 2009

From this month’s Construction Executive Magazine (Sorry, no online copy for this article, authored by Chris Mosley at Sherman & Howard LLC)

  1. Purchase the Right insurance – Review your policy limits to confirm the existence of completed operations coverage. Typical general liability policies limit coverage to $1 million, which is wholly inadequate for construction companies.   Also, liability policies limit their coverage for defects claimed during a single policy year ( i.e. you can’t file a claim for work that was done several years ago.)  Consider excess insurance including completed operations coverage.
  2. Procure the appropriate additional insured endorsements from subcontractors – GC’s should required Subcontractors to maintain their own completed operations coverage. Also, GC’s should review each Sub’s  additional insured endorsements.  If the Sub has not obtained  a completed operations additional insured endorsement, the GC is liable for that Sub’s defects.
  3. Hire a Qualified Insurance Broker – Make sure the broker as claims experience. Also, you should have confidence in your broker’s ability to review your risk exposure and the additional insured endorsements of your subcontractors.
  4. Engage a Personal Counsel Experienced in Insurance Issues – Doing so increases the probability that insurers will pay claims in full. It’s also best to find your attorney at the same time you are shopping for coverage, rather than doing so after a claim arises when you’re likely to have a few more things on your mind.

The Word is “Transparency” – Get Used to it

September 19, 2008

Attention General Contractors, Developers and anybody else within the sound of my blog(?) After the dust settles from our economy’s current meltdown and you are able to once again acquire the credit necessary for your next project, be ready for some serious changes when it comes to project transparency.

  • Say goodbye to your bank’s drive-by progress reports. Banks are going to go into “hyper drive” when it comes to guaranteeing that their projects are squeaky-clean and on time. Expect your reporting requirements to go way up and the bank’s leash to get real short.
  • If you didn’t like expense and hassle of 3rd-Party Peer Review for condos, you’re not going to be too happy because your insurance carrier to going to expand this requirement. Don’t be surprised if the practice makes its way to other types of construction. Yes, commercial and industrial markets, I’m talking to you.
  • Developers, if you thought HOA’s were in a bad mood before, you ain’t seen nothin’ yet. New condo buyers are going to be pretty sour after they are forced to downgrade from their original choices thanks to tightened mortgage credit.
  • Also Developers, expect to pay for the preparation of homeowner manuals for every unit you sell. You insurance company is finished covering for you after you’ve skimped on educating new homeowners on the care of their new high-tech habitat. Insurers have paid a lot of money over the years to cover homeowner claims for leaks, mold and structural damage that could have been avoided had their home been properly cared for.  The days of tossing them keys with a few appliance manuals on closing day are over.

In short, the days of completing projects using winks, nods and shortcuts are over. Those who buy, finance and insure your work are going to expect a transparent process with no surprises at the end. Get used to it.

Everything is Temporary on a Construction Site

August 15, 2008

In a scene from Moonstruck Loretta’s father played by Vincent Gardenia in a rather exasperating moment proclaims “Everything is temporary!”  Truer words were never spoken, especially when it comes to a construction site (ironically, Gardenia’s character is a plumber.)

Everything in a construction site is temporary. The obvious – office trailers, porta-potties, etc. And the not-so-obvious – quality systems and business relationships.

In this setting, why would any principle project partner invest financially in an enduring quality system that becomes as important to the building as the foundation?   It just doesn’t pencil out.  As a result, I’ve seen contractors who use standalone spreadsheets (created from scratch by the Quality Manager) to record the conditions on $150 million projects.  To put this in perspective, imagine how absurd it would seem for a factory with a $50 million operating budget to similar ad-hoc documents.

It’s ultimately up to the fiduciary partners (banks and insurers) who have a longer term interest in the success of the building to demand better. Improved systems for recording and monitoring construction operations add significant value to a building  during its construction by providing a means to reduce defects. The payoff for such systems would continue over the useful life of the building as the details of construction remain fresh and accessible years after the last sections of temporary fencing having been hauled away.

Who Benefits from Construction Verification? Vol. I – Dispute Resolution

November 27, 2007

This will be the first in an occasional series of posts discussing the benefits of Construction Verification for the construction industry.

What is Construction Verification?
Construction Verification is the process by which “As-Built” construction is confirmed to meet the specifications and intentions of the developer. While inspections serve to confirm adherence to various agency codes, construction verification encompasses a larger scope in order to confirm compliance with the vision of the developer.

There’s a reason why developers set aside as much as 17% of major construction project budgets for post construction claims, disputes and litigation. It’s because they’ll need it. When developers, contractors and other interested parties fall into dispute over the as-built condition of a project, a resolution can be a long time in coming.. continued