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.
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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