The increasing cost of large liability claims and a higher number of environmental claims are two of the top emerging liability trends, writes Denny Jacob. Other trends to be aware of include fewer workplace accidents and higher general liability throughout the world.
Environmental Protection Agency Administrator Scott Pruitt and acting wetlands director Mindy Eisenberg separately said the agency will use two rulemakings to repeal and replace the Waters of the US rule, also known as the Clean Water Rule. The EPA would revert to relying on a 1986 rule and 2008 guidance, which it is using while the most recent rule is in litigation.
Geopolitical instability is one of the top challenges currently facing the construction industry, joined by workforce management issues that include different labor laws, according to Willis Towers Watson research. Risks caused by geopolitical issues include the prospect of project postponement, delays and increasing uncertainty in government support.
Ambiguous regulations such as those surrounding high volatility commercial real estate projects have made traditional banks more cautious about construction lending, according to Eric Lemont, a real estate partner at Sullivan & Worcester. Lenders must have 50% in extra cash reserves, and although some exemptions are available, many lenders would do more construction financing if the regulations were different, said Eyzenberg & Company President David Eyzenberg.
Scope of work and change-order issues are among the top areas that project owners and developers must address to limit construction-defect litigation risks on residential projects, writes Rebecca Dow. Such parties must also be careful to include thorough indemnification obligations and warranties of defect-free work by contractors and to detail the insurance contractors and subcontractors must have.
Contractors can increase safety at construction sites with guardrails that follow International Building Code and Occupational Safety and Health Administration guidelines, writes Andrew Miller. Such guidelines require guardrails whenever a difference of at least 30 inches exists between lower and upper surfaces, and the structural load capacity of guardrails must be at least 50 pounds per linear foot and 200 pounds of concentrated force, according to IBC rules.
A contractor may be considered as the employer of a subcontractor's employees if the contractor has or shares the power to direct or supervise the workers directly or indirectly, writes Michael Lord. Other factors that can lead to an employer designation include whether a contractor can directly or indirectly fire such workers and whether the contractor shares or allocates responsibility for payroll, workers' compensation insurance or the provision of equipment and materials needed for work.
The New York Court of Appeals has ruled that damage caused by Superstorm Sandy to a tower crane is not covered under the builder's risk insurance program of the owner and contractor. The court ruled that even if initial coverage was extended to the tower crane for the event, it was defeated by the contractor's tools exclusion, which states that the policy doesn't cover loss or damage to machinery, equipment and other items that won't be a permanent part of the project itself.
Massachusetts contractor Atlantic Drain Service has been fined approximately $1.5 million for 18 safety violations stemming from a trench accident that resulted in the death of two workers last year. A 12-foot-deep trench collapsed at a Boston work site last October, breaking a fire hydrant supply line and filling the trench with water, killing Atlantic employees Robert Higgins and Kelvin Mattocks.
Inconsistent state funding has prompted the University of Minnesota Rochester to look at public-private partnerships to expand its campus, and part of the agreements would involve sharing the spaces to be constructed. "You have to be able to tolerate a little bit more ambiguity and to give up a little control, but there's great benefits to partnerships, and that's the hard transition for people in partnerships," says Chancellor Stephen Lehmkuhle.