Professional liability of a construction supervisor
Jul 14, 2020
By: Miri Levhar, VP, Itzick Simon - the leading construction insurance agency
The field of construction supervision is considered one of the "gray" areas in the construction industry in terms of torts and insurance. On the one hand, the construction supervisor fulfills a long list of functions with far-reaching implications for construction, and serves as the long arm of the client ordering the work in the field or the client's "insurance certificate." On the other hand, as of today, the field is "open" and unregulated. To the point that there are no threshold conditions to be appointed and called a "construction supervisor."
Israeli law does not require a license or certification for construction supervision, and in fact there is no definition of the supervisor's job (the supervisor supervises what he is defined as supervising according to the contract). The problem begins when the client asks to use the supervisor "as an insurance certificate" and makes him the supervisor of the entire site, while the contractor says, and rightly so, "Don't tell me how to do it because I am responsible for performing the work." In other words, we are faced with a built-in conflict in the level of responsibility of the contractor versus the supervisor.
Professional construction inspectors in the industry, including, of course, construction engineers, construction supervisors, and architects, have been seeking to regulate the field for years. Some have even formulated "ethical codes" or "regulations" to create a kind of standard. Among leading professionals, there is an understanding that only a clear, robust regulation can stabilize the industry, improve the quality of construction, prevent malfunctions, and enable a significant increase in the standard of construction and construction work in Israel.
In a sidebar, we note that some experts criticize these attempts from the perception that these are political claims stemming from a desire to "close the guild to new inspectors." This type of criticism stems from the fact that almost every serious site with construction failures also has a lead inspector.
Construction supervisors often find themselves dealing with insurance challenges. The roles of the construction supervisor are many and varied. In most cases, this is a contractual appointment by the client to ensure that construction is carried out in accordance with legal and regulatory requirements, in accordance with procedures and according to the design. The construction supervisor provides the contractor with the plans and provides a solution to any planning problems on the ground, inspects the skeleton work and is present at the castings, supervises the finishing work and infrastructure, confirms the quality of the materials and their compliance with the contract documents and the designers' instructions, confirms required measurements, ensures that samples are transferred to relevant laboratories and verifies the correctness of the results, checks for design deviations, guides the executing contractor and subcontractors, ensures that the work is progressing according to legal requirements, monitors work progress schedules, approves invoices, and more.
By: Miri Levhar, VP, Itzick Simon - the leading construction insurance agency
The field of construction supervision is considered one of the "gray" areas in the construction industry in terms of torts and insurance. On the one hand, the construction supervisor fulfills a long list of functions with far-reaching implications for construction, and serves as the long arm of the client ordering the work in the field or the client's "insurance certificate." On the other hand, as of today, the field is "open" and unregulated. To the point that there are no threshold conditions to be appointed and called a "construction supervisor."
Israeli law does not require a license or certification for construction supervision, and in fact there is no definition of the supervisor's job (the supervisor supervises what he is defined as supervising according to the contract). The problem begins when the client asks to use the supervisor "as an insurance certificate" and makes him the supervisor of the entire site, while the contractor says, and rightly so, "Don't tell me how to do it because I am responsible for performing the work." In other words, we are faced with a built-in conflict in the level of responsibility of the contractor versus the supervisor.
Professional construction inspectors in the industry, including, of course, construction engineers, construction supervisors, and architects, have been seeking to regulate the field for years. Some have even formulated "ethical codes" or "regulations" to create a kind of standard. Among leading professionals, there is an understanding that only a clear, robust regulation can stabilize the industry, improve the quality of construction, prevent malfunctions, and enable a significant increase in the standard of construction and construction work in Israel.
In a sidebar, we note that some experts criticize these attempts from the perception that these are political claims stemming from a desire to "close the guild to new inspectors." This type of criticism stems from the fact that almost every serious site with construction failures also has a lead inspector.
Construction supervisors often find themselves dealing with insurance challenges. The roles of the construction supervisor are many and varied. In most cases, this is a contractual appointment by the client to ensure that construction is carried out in accordance with legal and regulatory requirements, in accordance with procedures and according to the design. The construction supervisor provides the contractor with the plans and provides a solution to any planning problems on the ground, inspects the skeleton work and is present at the castings, supervises the finishing work and infrastructure, confirms the quality of the materials and their compliance with the contract documents and the designers' instructions, confirms required measurements, ensures that samples are transferred to relevant laboratories and verifies the correctness of the results, checks for design deviations, guides the executing contractor and subcontractors, ensures that the work is progressing according to legal requirements, monitors work progress schedules, approves invoices, and more.
The contractor's policy does not protect the supervisor's professional liability.
Among many construction supervisors in Israel, there is a (mis)perception that the contractor's insurance policy, purchased by the developer and/or the executing contractor, protects them on the day of the accident. According to this perception, in the event of an incident at the construction site that results in damage to anyone, if a claim is filed against the construction supervisors, the insurance company of the contractor's policy will provide the coverage.
Well, it is not. When a construction supervisor seeks to include him in the definition of the insured name in a contractor's work insurance policy, the insurance company will usually require the addition of a clause stating that the coverage does not apply to the supervisor's professional liability. That is, if a tort claim is filed following an incident at the construction site, and it is proven that the damage was caused as a result of the supervisor's professional negligence, the contractor's policy does not cover it.
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What is the solution?
The only way for the construction inspector to deal with the above-mentioned restriction/exception is by purchasing a professional liability policy privately.
Among many construction supervisors in Israel, there is a (mis)perception that the contractor's insurance policy, purchased by the developer and/or the executing contractor, protects them on the day of the accident. According to this perception, in the event of an incident at the construction site that results in damage to anyone, if a claim is filed against the construction supervisors, the insurance company of the contractor's policy will provide the coverage.
Well, it is not. When a construction supervisor seeks to include him in the definition of the insured name in a contractor's work insurance policy, the insurance company will usually require the addition of a clause stating that the coverage does not apply to the supervisor's professional liability. That is, if a tort claim is filed following an incident at the construction site, and it is proven that the damage was caused as a result of the supervisor's professional negligence, the contractor's policy does not cover it.
_____________________________________________________________
What is the solution?
The only way for the construction inspector to deal with the above-mentioned restriction/exception is by purchasing a professional liability policy privately.
The role of the construction inspector appointed by the client is not a statutory role. Unlike, for example, other positions whose roles are derived from the law, such as the engineer who performs supreme supervision or the foreman who is appointed by the building regulations. The law does not consolidate the areas of responsibility of the construction inspector, and this is formulated according to the agreement between the inspector and the client.
In the field of tort law, it is a settled rule that " the contractor cannot make a claim against the supervisor (b) along the lines of 'Why didn't you supervise me? '" That is, " the contractor is responsible for the quality of the work and cannot shirk his responsibility and shift it onto the supervisor " (see A.A. 7439/06).
On the other hand, the inspector can certainly be found liable for compensation. The obligations applicable to the inspector do not end at the contractual level. Due to being a professional entity, the inspector can be liable under tort law towards those to whom he owes a duty of care.
As stated, " A professional has a duty of care towards all those who, according to his knowledge, may be harmed by his professional activities " and " the labor supervision authority has a duty of responsibility in connection with the performance of the work " (AA 684/76). It was also determined that " the special status of the professional who supervises the performance of construction work may impose special obligations on him " (AA 3392/93, emphasis not in the original).
The ruling regarding the liability of a construction inspector
"Professional Liability Policy" and the date of filing the claim
A professional liability insurance policy, as a civil engineer or architect, is the only defense a supervisor can have against claims alleging negligence.
It is important to know that professional liability insurance for supervisors (and in general) is a policy based on the "date of filing the claim" (Claims Made). In order for the coverage to be valid, two cumulative conditions must be met:
- The inspector had a valid professional liability policy at the time of the incident.
- The inspector had a professional liability policy at the time the claim was filed.
Please note that the purpose of a professional liability insurance policy for inspectors is not only to help cover compensation that the inspector will be required to pay. The insurance also provides coverage for the legal expenses (within the limits of liability set out in the policy*) of conducting the trial.
When a "lawsuitable" event occurs on a construction site, it is likely that the lawsuit will be filed against all parties involved. Starting from the client and the construction operator, through the subcontractors, and of course ending with the planners, supervisors, third parties, and more. Although the lawsuit may be dismissed against some of the defendants, the conduct of the trial itself requires significant financial expenses.
Even a construction inspector who acted with the utmost professionalism, and whose performance was excellent, may be required to defend himself in court. Law firms that represent construction inspectors are specialized firms whose fees are charged accordingly. Without a valid professional liability insurance policy for inspectors, the legal expenses will be borne by the defendant.
A professional liability insurance policy, as a civil engineer or architect, is the only defense a supervisor can have against claims alleging negligence.
It is important to know that professional liability insurance for supervisors (and in general) is a policy based on the "date of filing the claim" (Claims Made). In order for the coverage to be valid, two cumulative conditions must be met:
The inspector had a valid professional liability policy at the time of the incident.
The inspector had a professional liability policy at the time the claim was filed.
Please note that the purpose of a professional liability insurance policy for inspectors is not only to help cover compensation that the inspector will be required to pay. The insurance also provides coverage for the legal expenses (within the limits of liability set out in the policy*) of conducting the trial.
When a "lawsuitable" event occurs on a construction site, it is likely that the lawsuit will be filed against all parties involved. Starting from the client and the construction operator, through the subcontractors, and of course ending with the planners, supervisors, third parties, and more. Although the lawsuit may be dismissed against some of the defendants, the conduct of the trial itself requires significant financial expenses.
Even a construction inspector who acted with the utmost professionalism, and whose performance was excellent, may be required to defend himself in court. Law firms that represent construction inspectors are specialized firms whose fees are charged accordingly. Without a valid professional liability insurance policy for inspectors, the legal expenses will be borne by the defendant.
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