The contractor, the policy and the fatal work accident

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.