Limitation period for insurance claims in contractor work insurance / product liability / professional liability
Sep 10, 2023
מאת: איציק סימון
מתי מתיישנת תביעת ביטוח והאם ידעתם על ההבדל בין תביעות רכוש לנזקי גוף? קראו אודות התיישנות בביטוח ע בודות קבלניות ובביטוחי אחריות מקצועית וחבות המוצר
התיישנות היא מושג משפטי שמבטא את פרק הזמן המקסימלי מבחינה חוקית להגשת תביעה החל מהיום שבו התגבשה עילתה. החוק הישראלי קובע תקופות התיישנות שונות לגבי נושאים שונים, אך עיקרון אחד נכון לכולן: בחלוף תקופת ההתיישנות, ובהעדר סיבה מוצדקת וחריגה, דין התביעה יהיה להידחות על הסף.
ככל שעסקינן בתביעות ביטוח בענף הבנייה, חשוב לחדד את הנושא. במאמר הקצר הבא נעסוק בכך הן מבחינת ביטוח עבודות קבלניות, והן במישורים של ביטוחי חבויות: אחריות מקצועית וחבות המוצר.
By: Itzick Simon
When does an insurance claim expire and did you know about the difference between property and bodily injury claims? Read about the statute of limitations in contractor work insurance and professional liability and product liability insurance.
The statute of limitations is a legal concept that expresses the maximum legal period of time for filing a claim from the day the cause of action arose. Israeli law sets different statutes of limitations for different issues, but one principle applies to all of them: upon the expiration of the statute of limitations, and in the absence of a justifiable and exceptional reason, the claim shall be dismissed outright .
As we deal with insurance claims in the construction industry, it is important to clarify the issue. In the following short article, we will address this both in terms of contractor work insurance and in terms of liability insurance: professional liability and product liability.
Statute of limitations in contractor work insurance and the difference between property damage and bodily injury
The contractor's policy consists of three chapters - property, third party and employers' liability . In cases where the claim is filed under Chapter A, property, it is usually a procedure in which the insured sues for damages incurred to the project work as a result of a physical and unforeseen event. For example, a wall collapse, flooding, fire, etc.
In claims of this type, according to Section 31 of the Insurance Contract Law, 5741-1981, the statute of limitations is three years, from the date of the event or from the date of discovery of the damage (whichever comes first).
Claims filed under Chapter 2 (Third Party), on the other hand, can be both personal injury claims and property damage claims. This is no small matter, as the statute of limitations for personal injury claims is 7 years (and not just 3 years as in property claims). The same is true for claims under Chapter 3, Employers' Liability, which concern personal injury to employees as a result of accidents that occur during their work on site.
Since the statute of limitations is not short, and stretches over 3 or 7 years, we often encounter a "long tail" phenomenon: the claim is filed several years later, its handling in the courts also takes a considerable period of time, and the insurance companies deal with the event for many years.
הפוליסה הקבלנית מורכבת משלושה פרקים – רכוש, צד ג' וחבות מעבידים. במקרים שבהם התביעה מוגשת מכוח פרק א', רכוש, מדובר בד"כ בהליך שבו המבוטח תובע בגין נזקים שנגרמו לו לעבודות הפרויקט כתוצאה מאירוע פיזי ובלתי צפוי מראש. למשל, קריסת קיר, הצפה, התלקחות אש וכדומה.
בתביעות מסוג זה, ע"פ סעיף 31 לחוק חוזה הביטוח, התשמ״א–1981, תקופת ההתיישנות הינה בת שלוש שנים, מיום האירוע או מתאריך גילוי הנזק (המוקדם מבניהם).
תביעות שמוגשות מכוח פרק ב' (צד שלישי), לעומת זאת, יכולות להיות גם תביעות בשל נזקי גוף וגם תביעות בגין נזקי רכוש. אין זה עניין של מה בכך שכן תקופת ההתיישנות בתביעות נזקי גוף הינה בת 7 שנים (ולא 3 שנים בלבד כמו בתביעות רכוש). הדברים נכונים גם לגבי תביעות מכוח הפרק השלישי, חבות מעבידים, שעניינן נזקי גוף לעובדים כתוצאה מתאונות שיארעו במהלך עבודתם באתר.
היות שתקופות ההתיישנות אינן קצרות, ונמתחות לאורך 3 שנים או 7 שנים, לעתים קרובות אנחנו נתקלים בתופעה של "זנב ארוך": התביעה מוגשת כעבור מספר שנים, ניהולה בבתי המשפט אורך אף הוא תקופה לא מבוטלת, וחברות הביטוח מתמודדות עם האירוע במשך שנים רבות.
An important issue to be aware of is the extension of the statute of limitations in the case of minor victims. Whether it is a minor bystander who is injured as a result of a hazard related to construction work or a minor employee who files a claim based on employer liability. In these situations, the statute of limitations will only begin from the moment the minor turns 18 until they reach the age of 25 (seven years). For example: It is certainly possible for a 10-year-old child who is injured near a construction site to file his claim for compensation up to 15 years later.
Are there any consequences for late filing within the statute of limitations?
In property claims, the insured is obligated to file his claim within the statute of limitations, and even on the last day . In practice, of course, it is not acceptable to wait until the 90th minute.
When the event occurs, the insured is obligated to notify the insurer of its occurrence, and to allow it to examine the damages in real time by its experts. Any delay in notification can have consequences regarding the insurer's response, its ability to assess the damages in real time, its right to examine its liability, raising suspicions regarding the credibility of the plaintiff and the claim, and so on.
If the insured does not provide the notification until some time has passed, the insurance company may raise various claims on its part. Mainly claims concerning the possibility of minimizing damages or its (the injured party's) right to document the incident in real time, to ascertain its results, and to examine options for action depending on the circumstances.
Example : A contractor files a claim with the insurance company under the property section and claims that about a year ago he suffered damage at the site that has cost him about a million shekels to date, for which he wants to receive coverage under the policy. The insurance company can claim that if the contractor had involved it in real time, then it could have managed it in a way that would have significantly reduced the repair costs it incurs. The significant gap between immediate notification and late notification can be a significant cause for dispute between the insured and the insurer.
The unequivocal recommendation regarding filing claims of this type is not to "take advantage" of the statute of limitations and think that you have "time to formulate the claim." The statute of limitations is not a "legal tool" and relying on it may turn out to be a mistake that could even lead to a lawsuit in the hands of the insured (to put it mildly).
Extension of the statute of limitations for minor victims
In property claims, the insured is obligated to file his claim within the statute of limitations, and even on the last day . In practice, of course, it is not acceptable to wait until the 90th minute.
When the event occurs, the insured is obligated to notify the insurer of its occurrence, and to allow it to examine the damages in real time by its experts. Any delay in notification can have consequences regarding the insurer's response, its ability to assess the damages in real time, its right to examine its liability, raising suspicions regarding the credibility of the plaintiff and the claim, and so on.
If the insured does not provide the notification until some time has passed, the insurance company may raise various claims on its part. Mainly claims concerning the possibility of minimizing damages or its (the injured party's) right to document the incident in real time, to ascertain its results, and to examine options for action depending on the circumstances.
Example : A contractor files a claim with the insurance company under the property section and claims that about a year ago he suffered damage at the site that has cost him about a million shekels to date, for which he wants to receive coverage under the policy. The insurance company can claim that if the contractor had involved it in real time, then it could have managed it in a way that would have significantly reduced the repair costs it incurs. The significant gap between immediate notification and late notification can be a significant cause for dispute between the insured and the insurer.
The unequivocal recommendation regarding filing claims of this type is not to "take advantage" of the statute of limitations and think that you have "time to formulate the claim." The statute of limitations is not a "legal tool" and relying on it may turn out to be a mistake that could even lead to a lawsuit in the hands of the insured (to put it mildly).
Are there any consequences for late filing within the statute of limitations?
Product liability and professional liability insurance are designed to provide coverage against third-party claims. Sometimes these involve bodily injury (such as a tile falling on a person walking in the street), or alternatively claims related to poor construction, a defect in the building, etc.
In these insurances, as in the contractor's policy, the statute of limitations for bodily injury and property damage are different and are 7 years and 3 years respectively. However, there is an additional parameter here, which is that the basis of insurance in these policies (as is currently customary in Israel) is of the "Claims Made" type.
In these insurances, the statute of limitations is not the only factor. The validity of coverage in Claims Made insurance depends on the existence of two cumulative conditions: a valid policy on the day of the event and a valid policy on the day the claim is filed (as long as it was filed within the statute of limitations, of course). Given that statutes of limitations can extend exposure even years into the future (the long tail phenomenon), this is even more true.
Statute of limitations for professional liability insurance or product liability insurance
In conclusion,
Statute of limitations is an important parameter that must be recognized when addressing claims for the activation of policies in the construction industry. Whether in claims by the insured himself (such as in claims under the property section of contractor work insurance), or in dealing with claims from third parties (such as in contractor insurance under third-party and employers' liability sections, and in professional liability or product liability insurance).
התיישנות היא פרמטר חשוב שיש להכיר בנוגע להתייחסות לתביעות להפעלה של פוליסות בענף הבנייה. בין אם בתביעות של המבוטח עצמו (כמו בתביעות לפי פרק הרכוש בביטוח עבודות קבלניות), ובין אם בהתמודדות עם תביעות של צדדים שלישיים (כמו בביטוחי קבלנים בפרקי צד שלישי וחבות מעבידים, ובביטוחי אחריות מקצועית או חבות המוצר).
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