Does TAMA 38 insurance cover cases of electric shock on site?
Mar 25, 2021
Article by: Itzick Simon
Does TAMA 38 insurance cover cases of electric shock on site?
In February 2021, the prosecution filed a serious indictment with the Tel Aviv court against a developer and contractor in the TAMA 38 project, following the death of a construction worker by electrocution. The indictment was filed for causing death by negligence , as well as for forgery and receiving something by fraud.
The unfortunate incident was caused, according to the indictment, by the negligent transfer of electric boilers from the project's roof to the existing apartments. It is alleged that the work was not performed by qualified electricians and with a connection to a temporary, dismantled, broken and non-standard electrical panel (contrary to mandatory regulations). From the developer's perspective, it is alleged that he did not perform the necessary actions to inspect the temporary electrical installation in the project.
The tragic event joins a phenomenon that is unfortunately becoming widespread – namely , electrocution of workers on construction sites. Including a number of serious cases in urban renewal projects according to TAMA 38. In February 2021, a construction worker was electrocuted to death at a TAMA 38 site in Ashdod, and three years earlier, in February 2018, a construction worker was killed under similar circumstances at a site in Kiryat Ono.
Electrocution in work situations is common in Israel. According to the National Insurance Institute, 1 in 20 fatal work accidents are caused by "electric shock." In 2018, for example, out of 70 deaths in work accidents, 8 were electrocuted.
Hazardous electrical factors on a construction site
Workers and visitors to construction sites are at high risk of contact with temporary and makeshift electricity. Exposed cables that are not buried in walls, dynamic movement of electricity from place to place, etc. Often, the activities related to tampering with electrical systems are not performed by qualified electricians.
On the contrary. There are countless interactions with the electrical installations on the construction site that are made by "regular" workers, and the project managers do not pay attention to every action.
In projects according to TAMA 38, reinforcement is an additional risk resulting from the fact that there is "live electricity" on the site. The building needs lighting and energy, not just electricity supply through service outlets like in "regular" projects. The electrical system serves the existing tenants and at the same time construction and electrical work is being carried out without the required professionalism and/or without the required caution.
Electrocution at a construction site, who is responsible?
Liability for damages due to electrocution at a construction site can lie with various parties. First and foremost, the professional parties involved in construction, such as the developer, contractor, electrical contractor, subcontractors, foreman, construction inspector, and the like.
It is also possible that the injured party and his family members will seek to impose liability on the electric company, which is responsible according to law and case law for electrical installations throughout the country. In TAMA 38 projects, in which the apartment owners are also a party to the agreement, there is exposure to a direct claim against them by virtue of the liability of a landowner in tort.
Given the large number of parties involved who could be held responsible for the incident, legal proceedings relating to electrocution are complex, lengthy, expensive, and exhausting.
Experience shows that almost everyone involved is sued in these proceedings, including professionals whose conduct was impeccable and who will not be required to pay any compensation at the end of the day. However, they too will be forced to defend themselves in court, incurring high financial expenses (along with reputational damage from the very existence of the lawsuit against them).
Liability in tort for electric shock injuries at a construction site may fall on various parties. Foremost among them are the professionals involved in the construction, including the developer, contractor, electrical contractor, subcontractors, site manager, and construction supervisor.
The injured person and their family may also seek to hold the Israel Electric Corporation liable, given its responsibility for electrical infrastructure nationwide under legislation and case law. In TAMA 38 projects, where apartment owners are also involved, they may face direct claims based on their liability as property owners.
With so many parties potentially responsible, legal proceedings involving electric shock injuries can be complex, lengthy, expensive, and exhausting.
Experience shows that almost everyone involved is sued, including professionals whose conduct was entirely proper and who ultimately bear no liability for compensation. Nevertheless, they must still defend themselves in court, incurring substantial costs and potentially suffering reputational damage simply because a claim has been brought against them.
Claims following electrocution on construction sites frequently escalate to high compensation amounts. This is because electrocution in most cases causes death, or at the very least, severe and irreversible medical damage.
There are also cases where it is difficult to provide medical assistance to the victim due to the danger posed to medical teams by a second electrocution. For example, in the incident that led to the filing of the indictment above, rescue forces were unable to help the deceased until an hour after the injury, when the power to the building was cut off.
If a person dies as a result of someone else's negligence, the claim for compensation includes heads of damages such as "lost years." These heads of damages represent the deceased's loss of earnings from the time of his death until he reaches retirement age (including social and pension rights). Claims filed after the death of a young worker whose salary was not high also reach considerable amounts.
The compensation amounts due are in the millions of shekels.
Claims arising from electric shock incidents at construction sites frequently involve substantial compensation. This is because such incidents often result in death or, at the very least, severe and irreversible injuries.
In some cases, providing medical assistance is difficult because rescuers themselves risk electric shock. For example, in the incident that led to the indictment discussed above, emergency responders could not assist the deceased until an hour after the incident, when the building’s electricity supply was disconnected.
When a person dies as a result of someone else’s negligence, the compensation claim includes heads of loss such as the “lost years.” These represent the deceased’s lost earnings from the date of death until retirement age, including employment benefits and pension entitlements. Even claims following the death of a young worker whose wages were relatively low can amount to substantial sums.
Contractor work insurance in the event of electric shock
A construction work insurance policy is the insurance policy that protects the developer, contractor, and tenants in the event of an incident at a construction site according to TAMA 38, including electrocution.
The policy consists of three chapters, with the chapter concerning "employers' liability" intended to provide a response to negligence claims filed by employees against their employer. The chapter concerning third parties is intended to cover electrocution of people not related to the project, such as visitors, passersby, the curious, family members who arrived at the site, etc., but also employees of subcontractors, as they are third parties towards the main contractor, and in general - by virtue of a cross-liability clause, different insureds in the policy can be plaintiffs and defendants towards each other.
If it is an injured worker, the National Insurance Institute will recognize him as a work injury victim and pay him or his family various benefits. Often, the injured party or his family members will also file a parallel claim against parties who are alleged to have been negligent in their duties. This claim will include a demand for compensation for damages not paid by the National Insurance Institute (such as pain and suffering or mental anguish), as well as for amounts beyond what the National Insurance benefits include.
When purchasing insurance for contractor work for TAMA 38, the limits of liability in the policy must be examined. Are they adequate and do they correspond with the latest case law in Israel regarding tort law (which recognizes the entitlement of victims to compensation in significant amounts). It is also desirable that the developer be the one to purchase the policy and be defined as the primary insured, and that the tenants and the executing contractor be able to step into his shoes if he withdraws from the project for any reason.
A Contractors’ All Risks policy protects the developer, contractor, and residents against incidents at a TAMA 38 construction site, including electric shock.
The policy comprises three sections. The employers’ liability section is intended to cover negligence claims brought by employees against their employer. The third party liability section is intended to cover electric shock injuries sustained by people unconnected with the project, such as visitors, passersby, onlookers, and visiting family members. It should also cover subcontractors’ employees, who are third parties in relation to the main contractor. More generally, under the cross liability clause, different insured parties under the same policy may bring claims against one another.
If an employee is injured, the National Insurance Institute will recognize the incident as a workplace injury and pay various benefits to the worker or their family. Frequently, the injured worker or their family will also bring a parallel claim against parties alleged to have been negligent in performing their duties. This claim will seek compensation for losses not covered by National Insurance benefits, such as pain and suffering or emotional distress, as well as amounts exceeding those benefits.
When purchasing Contractors’ All Risks insurance for a TAMA 38 project, the policy’s liability limits should be examined. Are they adequate, and do they reflect current Israeli tort case law, which recognizes injured parties’ entitlement to substantial compensation? It is also advisable for the developer to purchase the policy and be designated as the principal insured, with provisions allowing the residents and the construction contractor to step into that role if the developer leaves the project for any reason.
Electrocution at an urban renewal site could result in not only a tort claim but also a criminal indictment. Causing death through negligence is a serious offense that carries a prison sentence of up to 3 years. This is in addition to the unprecedented damage caused by the very fact of prosecution and the administration of justice. In Israel, where the conviction rate is more than 95%, this is even more pronounced.
Contractors' insurance also provides a solution for criminal matters, but you must purchase a quality policy that addresses various nuances related to this. For example:
Applying insurance coverage from the date of the incident and not just from the time of filing an indictment. This is in order to provide insurance coverage for the large financial expenses required in the proceedings prior to filing an indictment (police investigation, accident investigator investigation, etc.).
Legal coverage for adequate representation – Criminal lawyers charge high fees, especially when it comes to top-notch lawyers who have specific expertise in the complex subject of fatal work accidents due to (alleged) negligent death. In order for the insured to be properly represented by a leading law firm, he must ensure in advance that he has adequate and high-quality coverage in the contractor's policy.
Criminal proceedings following an electrocution incident
Planners, engineers and architects involved in TAMA 38 projects can find themselves sued following electrocution at the construction site. These professionals are not protected under the contractor's policy regarding their professional liability and the relevant policy here is " professional liability insurance ".
Even in professional liability insurance, care must be taken to set adequate coverage limits against claims filed for large amounts. It is also important to know that professional liability insurance is insurance that is based on the "date of filing the claim." Its validity depends on two cumulative conditions:
- The insurance was valid at the time of the incident.
- The insurance was valid at the time the claim was filed.
It should be noted that from the perspective of planners or engineers, the "time of the event" in work accidents is not necessarily the electrocution itself, but sometimes the time when they designed the plan that allegedly led to the incident.
Professional liability insurance must therefore be valid for the entire period of the insured's activity. It must be maintained and renewed, including even after retirement. Claims for accidents on construction sites can be filed against planners even many years after the project has been completed.
In conclusion
As mentioned, electrocution incidents are not uncommon in our regions and unfortunately this is a national disaster when it comes to the construction industry. Along with the necessary advance care in terms of purchasing adequate insurance, it is important to take all necessary measures to prevent the next disaster. Care must be taken to distinguish between minor and serious when dealing with electricity, and especially on construction sites where electrical systems are "prone to disaster."
As can be seen from the indictment we presented at the beginning of the article, the responsibility lies with all those involved, starting with the developer and the main contractor, and ending with each of the professional entities operating in the field.
Professional liability for an electric shock incident
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