The contractor, the policy and the fatal work accident
May 28, 2019
By Itzik Simon
Purchasing contractor’s works insurance requires experience, knowledge, professionalism, and the ability to pay attention to every detail. Not for nothing does our insurance agency focus exclusively on construction-related insurance—we do not operate in other insurance areas. Recently, I received (once again) a clear example of why this specialization matters, and unfortunately, this example involves regrettable circumstances.
Here’s what happened. About a year and a half ago, I met with a contractor who wanted to sit down with me after receiving recommendations about our agency, in order to arrange a policy for two new projects. We met at his office; I presented the agency and our work, emphasized our added value, and the contractor was impressed. Right then and there, he decided to work with us and signed all the relevant paperwork.
Just as I was about to leave, the contractor stopped me and asked if I could review a contractor’s works insurance policy that had been purchased by a developer for a project he was executing in central Israel.
“Of course,” I replied, and opened the documents. But as I began reading, the smile vanished from my face. I realized I was looking at a policy riddled with “fatal” errors in definitions and coverage. For example, there were about 30 bizarre safety requirements, many of which a construction site could not possibly comply with. Examples included requirements that all contractors participating in the project must be registered contractors, and that the contractor must enforce the use of safety equipment by every single worker at all times. Separate insurance for cranes?
As I continued reading, I came across another requirement that simply “stunned me,” related to crane operations on the site. The policy stipulated that the insured must purchase a separate, primary third-party insurance policy specifically for crane operations, amounting to millions of shekels. Additionally, the insured was required to purchase yet another separate and primary employer’s liability policy for crane operations. From my experience, such policies are virtually impossible to obtain on the Israeli market.
“Listen carefully,” I told the contractor, “you are in trouble. The project started eight months ago, and with this policy, you are exposed to daily risk—even as we speak. Go immediately to the developer and tell them you cannot continue working on the site under these insurance conditions, and demand that the policy be corrected.”
“No problem,” the contractor agreed, and we parted ways.
By Itzick Simon
Purchasing construction insurance requires experience, knowledge, professionalism, and attention to detail. It is no coincidence that our insurance agency focuses exclusively on insurance related to the construction industry , and we do not operate in other insurance channels. I recently received (again) an example of this, and unfortunately, once again, the example involves unfortunate circumstances.
It happened like this. About a year and a half ago, I came to a meeting with a contractor who asked to sit down with me after receiving recommendations about the insurance agency, in order to prepare a policy for two new projects. We sat in his office, I introduced him to the agency and its work, emphasized our added values, and the contractor was impressed. He immediately decided that he was interested in working with us and signed all the relevant paperwork.
Just before I was about to walk out the door, the contractor stopped me and asked me, if I could, to go over a contractor work insurance policy purchased by a developer for a project he was carrying out in the center of the country.
"With pleasure," I replied, and opened the documents. However, when I started reading, the smile disappeared from my face. I realized that I was looking at a policy with countless "fatal" errors in the definitions and insurance coverage . Including, for example, about 30 different and strange protection requirements, including many requirements that there is no way a construction site could meet. For example, a requirement that all contractors taking part in the project be registered contractors , or that the contractor enforce the use of safety equipment by each and every employee at any given moment .
Separate insurance for cranes?
As I continued reading, I came across another requirement that simply "stumbled upon me," related to the crane's activity on the site. The policy stated that the insured must purchase a separate and initial third-party policy from the contractor's work insurance regarding the crane's activity, in the amount of millions of shekels . It was also determined that the insured would be required to purchase an additional, separate and initial policy of employers' liability insurance, in connection with the crane's activity on the site. I will note from my experience that it is simply impossible to purchase this type of insurance in the Israeli market.
"Listen to me carefully," I said to the contractor, "you're in trouble. The project started eight months ago and with this policy you're at risk every day, even as we speak."
"Go to the developer immediately and tell him that you cannot continue working on the site under these insurance conditions and that the policy needs to be amended." No problem, the contractor thanked me, and we said goodbye.
Work accident on site, has the policy been handled?
About six months ago, I received a call from my contractor friends. "Don't ask," he said, "There was a fatal work accident at the construction site. A concrete boiler that was being lifted by a crane broke and fell on a worker who was killed on the spot. Please send me your work accident expert and help me get through the incident."
"No problem," I replied, "but did you handle the policy as we discussed in our meeting?" The silence on the other end of the line said it all. "Wallah, I forgot," he replied.
My friend the contractor didn't bother to take care of the policy, and now he's in a complicated situation. A worker was killed on site due to crane operation, and the insurance policy is loaded with terms and conditions that may not help him now, when the day of reckoning has arrived.
In conclusion, the message is clear . Insurance for construction work should only be done with an insurance agency that is familiar with the policy options on the market , and that is familiar with the risks that characterize the construction industry in Israel. When purchasing a construction policy, one should carefully read all the exclusions, understand all the conditions and nuances, and carefully review the "fine print."
About six months ago, I received a phone call from my contractor friend. “Don’t ask,” he said, “there was a fatal work accident at the construction site. A concrete slab being lifted by a crane tore loose and fell on a worker, who was killed instantly. Please send your workplace accident expert and help me handle the situation.”
“No problem,” I replied, “but did you take care of the insurance policy as we discussed in our meeting?” The silence on the other end of the line said it all. “Honestly, I forgot,” he admitted.
My contractor friend had neglected to arrange the policy, and now he is in a very difficult situation. A worker has died on site due to crane operations, and the insurance policy is filled with conditions and exclusions that may very well not protect him now that the critical moment has arrived.
In conclusion, the message is clear: contractor’s works insurance should only be arranged through an insurance agency that is well-versed in the nuances of policies on the market and familiar with the specific risks of the construction industry in Israel. When purchasing a contractor’s insurance policy, it is essential to read all the exclusions carefully, understand every term and nuance, and scrutinize the “fine print.”
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