Overnight stay for workers on a construction site – the insurance aspects
Nov 18, 2019
By: Itzick Simon, CEO
The construction industry employs over 15,000 foreign workers each year, who come to Israel for various periods under a series of international bilateral agreements (mainly with China and countries in Eastern Europe). In many cases, the employment of these workers includes accommodation on construction sites . Israeli law allows this, with living conditions being well defined in the Foreign Workers (Prohibition of Illegal Employment and Ensuring Fair Conditions) (Adequate Housing) Regulations, 2000.
In addition, construction sites often also house field workers, and this phenomenon is likely to expand during the coronavirus pandemic. However, while the solution entails advantages for the employer and the employees, staying on the construction site outside of working hours may create various risks. Risks that may roll into the employer's door - whether he is the direct employer or whether it concerns third-party workers. In this short list, we will discuss some of the main points related to the insurance policy in the case of workers living on the construction site.
Bodily injuries, property damage, and more
Insurance companies and policyholders are not always aware of the full range of risks they are taking on when having workers on site. Especially in light of the fact that often a contractor work insurance policy is purchased based on an engineering survey conducted before the work begins and before the caravans or portable structures have even been moved onto the site.
That is, according to the picture before the surveyor on behalf of the insurance company, who at this stage is looking at an empty site, a rough draft, sometimes a simulation, construction plans, land reports, and the like.
The list of risks is long. Starting from property-related damages, to accidents and unfortunate events that will end in bodily harm. It is also known that when the workers-"tenants" cook their meals on site - usually using wicks, barbecues or portable stoves - this constitutes a dangerous factor for a fire to break out on site. On large construction sites with a large number of entrances, there is also a possibility of workers not being identified by the security company that was hired to secure the site, a situation that is fertile ground for the formation of unusual events.
By: Itzick Simon, CEO
The construction industry employs over 15,000 foreign workers each year, who come to Israel for various periods under a series of international bilateral agreements (mainly with China and countries in Eastern Europe).
In many cases, the employment of these workers includes accommodation on construction sites . Israeli law allows this, with living conditions being well defined in the Foreign Workers (Prohibition of Illegal Employment and Ensuring Fair Conditions) (Adequate Housing) Regulations, 2000.
In addition, construction sites often also house field workers, and this phenomenon is likely to expand during the coronavirus pandemic.
However, while the solution entails advantages for the employer and the employees, staying on the construction site outside of working hours may create various risks. Risks that may roll into the employer's door - whether he is the direct employer or whether it concerns third-party workers. In this short list, we will discuss some of the main points related to the insurance policy in the case of workers living on the construction site.
Bodily injuries, property damage, and more
Insurance companies and policyholders are not always aware of the full range of risks they are taking on when having workers on site. Especially in light of the fact that often a contractor work insurance policy is purchased based on an engineering survey conducted before the work begins and before the caravans or portable structures have even been moved onto the site.
That is, according to the picture before the surveyor on behalf of the insurance company, who at this stage is looking at an empty site, a rough draft, sometimes a simulation, construction plans, land reports, and the like.
The list of risks is long. Starting from property-related damages, to accidents and unfortunate events that will end in bodily harm. It is also known that when the workers-"tenants" cook their meals on site - usually using wicks, barbecues or portable stoves - this constitutes a dangerous factor for a fire to break out on site. On large construction sites with a large number of entrances, there is also a possibility of workers not being identified by the security company that was hired to secure the site, a situation that is fertile ground for the formation of unusual events.
What does the insurance stipulate?
A contractor work insurance policy may provide insurance coverage for liability claims related to workers staying on site. Both in Chapter B, which deals with third-party insurance , to the extent that they deal with contractor workers who are not employees of the insured, and in Chapter C, which deals with employer liability , to the extent that they are direct employees.
Both the insured and the insurance companies need to give their opinion on future accommodation for workers on the construction site. It is advisable for the surveyors to draw up a specific description and review in advance, derived, among other things, from the existence of such a challenge.
The insured, from their perspective, should understand that it is in their direct interest to reach a contractor insurance policy that recognizes that workers are expected to be on site after hours of operation, even if this translates into additional costs in the insurance rates.
Our recommendation is to completely separate the construction site itself from the accommodation area by means of appropriate fencing, and of course, care must be taken to ensure that the workers' quarters provide adequate living conditions (as required in accordance with the full range of conditions well defined in the Foreign Workers Regulations), and that the workers adhere to appropriate safety rules.
For example, it must be ensured that employees are aware that they are not allowed to leave the living area to the "inside the site" without proper lighting, outside of working hours, without protective equipment and contrary to the rules. It must also be ensured that they are aware of the dangers resulting from the use of fire for cooking, and that safe equipment is used for heating, heating, ventilation, etc. In a parenthetical article, we emphasize that the employer is obliged, by virtue of the regulations, to ensure the existence of fire extinguishing means, and must ascertain that employees know how to call for help in the event of an incident (fire department, Magen David Adom, police, etc.). In a parenthetical article, we note that insurance for the buildings and contents used for accommodation can be registered in the contractor's policy, and can be carried out separately.
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A contractors’ works insurance policy may provide coverage for liability claims related to workers’ accommodation on-site. This applies both under Section B, which deals with third-party liability (where the workers are subcontractors and not direct employees of the insured), and under Section C, which concerns employer liability for direct employees.
Both the insured parties and the insurance companies should consider the potential for workers to stay overnight at the construction site. It is advisable that surveyors prepare in advance a specific description and assessment derived, among other things, from the presence of such a challenge.
From the insured ’s perspective, it is in their direct interest to ensure that the contractors’ works insurance policy recognizes that workers may be present on-site after working hours—even if this results in additional costs in the insurance premium. Our recommendation is to create a complete separation between the construction site itself and the living area using appropriate fencing. Of course, worker accommodations must provide suitable living conditions (as required under the comprehensive conditions set in the Foreign Workers Regulations), and workers must adhere to proper safety rules.
For example, it should be ensured that workers are aware that they may not enter the “site area” without proper lighting, outside of working hours, without protective equipment, and contrary to safety rules. It is also important that they understand the dangers of using fire for cooking, and that safe equipment is used for heating, ventilation, and similar purposes.
It should be noted that the employer is obligated under the regulations to ensure the availability of fire extinguishing equipment, and must confirm that workers know how to summon help in case of an emergency (fire, Magen David Adom, police, etc.). In addition, insurance for the buildings and contents used for accommodation can be included in the contractors’ works policy, or it can be insured separately.
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Many construction sites in Israel employ workers who decide of their own accord to spend the night on site, sometimes even in the absence of any official permission from the contractor, and in exceptional cases, in secret.
It is very important for the employer to understand that if the employees remain on site without his permission and illegally, if they are harmed on the premises, he may be held liable. This is even if overnight stays were expressly prohibited, and if it is proven that the employer could have known (or expected) that the employees intended to sleep on site.
For example, several years ago, the Jerusalem court awarded damages in the amount of over 400,000 shekels against a contracting company whose Palestinian construction worker (through a staffing company) decided to sleep at the construction site and fell from an elevator shaft during the night (Ta 2735/02, issued in July 2006).
The company argued that it should not be held liable, given that the employee "chose of his own accord" to stay overnight on site. "Just as he took care of his own mattresses and electricity," they argued, "so he should have taken care of safety measures." The defendant believed that it would not be liable for compensation for an incident that occurred after working hours, but this approach was rejected by the court.
The ruling determined that the company "had to ensure that if workers slept on site, they did so in a safe and well-lit place, while ensuring that it knew where they were sleeping, checking that this place could be reached in a reasonable and safe manner, and that lighting was arranged on the stairs leading to that place." It should be noted that the company's engineer saw the workers take mattresses and intend to sleep there, and denials in retrospect were easily rejected.
Criminal and administrative proceedings for violation of foreign worker regulations
Another interesting issue at the insurance level is the question of responding to criminal and administrative proceedings involving violations of foreign worker regulations in providing adequate housing for workers. As noted above, foreign worker regulations establish a long list of conditions regarding adequate housing for workers. Violation may result in criminal and administrative proceedings against the employer and/or the person responsible for the construction site.
Additional challenges – staying at a construction site without a permit
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