Murphy's Law: About the balcony railing that fell out of place and the contractor who almost lost everything
Sep 18, 2024
By: Louisa Matatov, Attorney
Murphy's Law applies to every field, and unfortunately, to the construction industry as well. But while a simple Murphy's Law, which is expressed in the sandwich falling on the buttered side, will only end with a quick wipe, mishaps in construction projects can result in serious injuries and even death. This is the story of a contractor, one of our clients, who almost learned this lesson the hard way.
A few months ago, we contacted a client of ours, a construction contractor, and mentioned to him that he needed to renew his professional liability and product liability policies. The contractor asked to “think about it,” but since we are aware of the huge insurance exposure of this matter, we did not hesitate and asked him to come to our office for a meeting before he threw the decision to the bottom of his to-do list.
By: Louisa Matatov, Attorney
Murphy's Law applies to every field, and unfortunately, to the construction industry as well. But while a simple Murphy's Law, which is expressed in the sandwich falling on the buttered side, will only end with a quick wipe, mishaps in construction projects can result in serious injuries and even death. This is the story of a contractor, one of our clients, who almost learned this lesson the hard way.
A few months ago, we contacted a client of ours, a construction contractor, and mentioned to him that he needed to renew his professional liability and product liability policies. The contractor asked to “think about it,” but since we are aware of the huge insurance exposure of this matter, we did not hesitate and asked him to come to our office for a meeting before he threw the decision to the bottom of his to-do list.
"I'll think about it"?
During the meeting, the contractor sat with our best team members who explained to him, in your little home, what the consequences of not renewing professional liability and product liability policies could be.
We emphasized to him the nature of the insurance coverage, the extensive exposure to which he is subject, and the fact that these are "Claims Made" type policies. That is, policies whose validity on the day of the order depends on both their existence at the time the claim is filed and at the time of the insured event, which can be many years away . We explained to the contractor that these are claims that can amount to huge amounts. Especially if they include bodily injury or death benefits.
Despite the many explanations and examples presented from 35 years of experience in the field, the contractor remained "skeptical" and even left the meeting with a vague promise, "I'll think about it."
במהלך הפגישה הקבלן ישב עם מיטב אנשי הצוות שלנו שהסבירו לו, ברחל ביתך הקטנה, מה עלולות להיות ההשלכות של אי חידוש פוליסות מסוג אחריות מקצועית וחבות מוצר.
הדגשנו בפניו את מהות הכיסויים הביטוחים, את החשיפה הרחבה שהוא נתון בה ואת העובדה שמדובר בפוליסות מסוג "מועד הגשת התביעה" (Claims Made). כלומר, פוליסות שהתוקף שלהן ביום פקודה תלוי גם בקיומן בזמן הגשת התביעה וגם בזמן האירוע הביטוחי שיכול במרחק של שנים רבות. הסברנו לקבלן שמדובר בתביעות שיכולות לטפס לסכומי עתק. במיוחד אם הן כוללות נזקי גוף או חו"ח מוות.
למרות ההסברים הרבים והדוגמאות שהוצגו מתוך ניסיון בתחום של כ-35 שנה, הקבלן נותר "סקפטי" וגם מהפגישה הוא יצא עם הבטחה עמומה "אני אחשוב על זה".
As fate would have it, just a few days after that meeting, a child on the contractor's project was leaning on a balcony railing that suddenly broke off and only miraculously did not cause the minor to fall from a great height. The contractor called us immediately, terrified (and rightly so!). He understood firsthand the importance of constantly renewing professional indemnity and product liability insurance.
If it weren't for the great miracle in the building, if the child had fallen to his death or been seriously injured, in the absence of insurance, the claim would have been filed directly against the contractor. Without any insurance company to assist. This is a claim that could easily climb to huge sums of millions of shekels, especially in light of the passage of the lost years, which we have also discussed quite a bit on our agency website ( see here, for example ). It is clear that this type of claim can financially crush the contractor and inflict a business disaster on him from which few recover.
The miracle in a building that almost ended in disaster
In conclusion,
Don't tell me it won't happen . Murphy's Law also applies to the construction industry and the price is expensive. Taking out proper and professional insurance, including renewing it and maintaining insurance continuity regularly, is the best and practically the only protection that will stand by your side when needed.
Don't tell me it won't happen . Murphy's Law also applies to the construction industry and the price is expensive. Taking out proper and professional insurance, including renewing it and maintaining insurance continuity regularly, is the best and practically the only protection that will stand by your side when needed.
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