Risk Management

Knowing what your Commercial General Liability (CGL) insurance policy can provide in terms of a construction defect lawsuit defense and payment is crucial. 

With many property owners still owing more than their properties are worth, combined with the run-up in construction in the mid-2000s and resulting poor quality in many instances, I am led to conclude that thousands of construction defect suits will likely be filed in the next two or three years. Anti-construction defect litigation statutes adopted in many states will have little effect in stemming the tide. Component manufacturers will be among the many in the construction chain having to figure out how to defend and extricate themselves from such suits. 

Knowing what your Commercial General Liability (CGL) insurance policy can provide in terms of a construction defect lawsuit defense and payment is crucial. Understanding the degree to which many insurance companies will go to neither defend nor pay on construction defect claims is even more important. Far too many construction subcontractors and suppliers, including component manufacturers, are, in my opinion, naive when it comes to knowing what to expect from, and how to effectively manage, their insurance companies over a construction defect lawsuit.

• Be proactive and develop a plan to strategize how you might deal with a truss collapse and the subsequent investigation.
• Information is critical; visit the site, take lots of photos and document as much as you can.
• Remember that the only company looking out for your company’s best interests is your own. Take action with this in mind, and ultimately, it will save everyone money and time.

• President Steve Stroder gives an example of how SCORE helped reduce accidents at one of his company’s facilities.
• Collectively, the industry can raise the bar on safety through the SCORE program.
• The goal of SCORE is to provide industry best practices and generate data to help CMs track and manage their facility, following the belief that, if you measure something, improvement will follow. 

• Only scaffold-grade lumber should be used for erecting scaffolds.
• Scaffold-grade lumber meets strength criteria determined by the grading rules set by a recognized lumber grading agency or independent lumber inspection agency and meet the minimum requirements of OSHA standard 29 CFR 1926.
• The characteristics required for scaffold-grade lumber, such as number and size of knots, slope of grain and juvenile wood, are higher and more stringent than those for construction lumber.