2018 Break-Out Sessions
Breakout Session 1: Building Enclosures
Sealing the Envelope: What Construction Risk Managers Need to Know about Building Enclosures, Including the Goals and Components of an Effective Enclosure Program
Among the most common and costly construction defects are defects in curtain walls and other building enclosures. All too often, such defects permit water to intrude into the interior of a building where it can cause extensive damage to other property. In a pro-active effort to help everyone head off such defects and prevent water damage, the speakers will identify and explain the nine steps necessary to ensure that building enclosures consistently perform well. What are the individual components of an effective enclosure program? How can risk managers ensure that their project teams are consistently taking those steps? What should sureties and insurance carriers expect of their counterparts in the construction industry? The speakers will address these and a host of related questions.
- Brian Stroik, Tremco
- Neal Morton, Barton Malow Company
Breakout Session 2: Commercial Auto Coverage
Driving Defensively: Why the Premiums for Commercial Auto Policies Are Increasing and How to Limit the Potential Impact on Your Cost of Risk
This session will begin with a review of the combined ratios driving up the cost of commercial auto coverage and the nature of the claims driving up those ratios. The session will continue with a case study of one large construction contractor’s fleet exposures, including the lessons learned from that study. The speakers will then identify and explain the policies, protocols, procedures and technology that can limit the frequency and/or severity of auto claims. Along the way, they will also share and discuss the practical problems that construction risk managers are likely to encounter as they try to improve their fleet safety programs. The bottom line is that on-road vehicles are a familiar but growing risk and managing that risk requires a coordinated effort to manage people, vehicles and information technology.
- Teresa Martin, Lockton Companies
- Darren Beard, Lockton Companies
- David Buckman, Core Construction
Breakout Session 3: Cybersecurity
Choosing Wisely: How to Manage the Risk that Vendors and/or Subcontractors Will Leave You “Holding the Bag” for Their Shortcomings
This session will begin with the several potential sources of “obligation” and liability for a breach of cybersecurity, including the regulatory, contractual and common law requirements that could put any firm in jeopardy. The speakers will then identify the laws, regulations and other standards likely to define the standard of care that the common law will soon expect everyone to meet. Finally, they will address the IT vendors, third party administrators, subcontractors and suppliers who could put any general construction contractor at significantly greater risk of liability. What do general contractors need to know about the other parties with whom they want and may need to do business? What are the contractual terms and conditions that can protect such contractors from the risk that other parties will not meet their obligations? As the speakers will note, the “internet of things” is greatly raising the stakes.
- Tim Harvey, Skanska USA Building
- Rodney Moss, Hunt Development Group
- John Tomaszewski, Seyfarth Shaw
Breakout Session 4: New FASB Standards
Changing with the Times: The New Revenue Recognition and Lease Standards that the Financial Accounting Standards Board (FASB) Has Established and the Impact They Are Likely to Have on Construction Contractors’ Financial Statements
Two new FASB standards will take effect over the next two years. One is a revenue recognition standard that non-public construction contractors will have to apply to all periods that begin on or after December 16, 2018. The other is a lease standard such contractors will have to apply to all periods that begin on or after December 16, 2019. In significant but different ways, each of these new standards will change the way that sureties and others should read and understand such contractors’ financial statements. To help them do so, this session will identify and explain the key elements of each of standard. The speaker will walk through the five steps necessary to apply the new revenue recognition standard, and as she does, she will provide concrete examples that well illustrate the key points. She will similarly explain the impact that the new lease standard will have on net assets and other metrics.
- Kathleen Baldwin, CICPAC
Breakout Session 5: Non-Traditional Risk Allocation
Playing a Changing Game: The Growing List of Non-Traditional Risks that Owners are Shifting to Construction Contractors and Whether, and to What Extent, the Insurance Industry Can Help the Construction Industry Manage Those Risks
Alternative delivery systems and public-private partnerships have shaken up the construction industry in many ways. Some have been positive but others not so much. Along with these innovations have come a growing number of owners bent on transferring risks that owners have traditionally retained. Examples would include the direct and indirect costs of dealing with unexpected discoveries, such as historical or other artifacts, or environmentally sensitive areas, or hazardous materials. Also on many tables are the costs of dealing with unusual weather events, and even the costs resulting from delays in getting permits. During this session, the speaker will identify the non-traditional risks that today’s construction contractors have to contemplate and whether, and to what extent, contractors can hope to find or devise insurance products to limit their exposure.
- Adrian Pellen, Marsh USA
Breakout Session 6: Natural Disasters
Picking Up the Pieces: How to Batten Down the Hatches and Later Deal with the Aftermath of a Hurricane or Other Natural Disaster
Real-world experience with hurricanes and other natural disasters reveal that such events can and often do require construction contractors to split their time and attention at least three ways: among their directly affected projects, their indirectly affected projects, and of course, their employees. During this session, experienced professionals will provide their insights into the challenges that lie in each of these three areas, including the challenges that are likely to precede a weather event. As the speakers will explain, a kaleidoscope of contractual and insurance obligations all require attention. And then there are the duties to mitigate delays, costs and losses. And at the head of the line are the safety and security of the company’s employees. Come listen and learn how others have organized themselves and which strategies have been the most successful.
- Steven Charney, Peckar & Abramson
- Curt Martin, Peckar & Abramson
- Mario Menendez, Webber / Ferrovial Agroman
- Adam Handfinger, Peckar & Abramson
- Dave Glasser, Moss & Associates
Breakout Session 7: Mitigation Cost Coverage
Cutting Your Losses: Where and to What Extent Construction Contractors Can Expect to Find Insurance Coverage for the Cost of Mitigating Ongoing Property Damage
Depending on their nature and scope, construction defects can certainly cause damage to other property. And sometimes that damage is ongoing. Indeed, examples are easy to find. But insurance coverage for the costs of preventing further damage, and mitigating the loss, can be difficult to sort out. Builders’ risk, commercial general liability, professional liability, pollution liability, subcontractor default and contractors’ protective insurance policies all treat such costs differently. During this session, the speakers will explain how. In the process, and with the assistance of several case studies, they will also clarify which policies cover what forms of mitigation. The ultimate objective is to equip everyone with the legal theories and the practical strategies that will collectively maximize construction contractors’ coverage for the cost of minimizing ongoing property damage.
- Zac McIsaac, Ashbaugh Beal
- Michael Clark, Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel
- Lynnette Thompson, Barnard Construction Company
- Eric Friend, Traylor Bros.
Breakout Session 8: Subcontractor Bond Forms
Getting Up to Speed: The Terms, Conditions and Business Practices that Can Make a Material Difference in How Well Subcontractor Bonds Continue to Meet Industry Needs
This session will focus on the bonds that many general contractors continue to consider the best way to guarantee their subcontractors’ performance. In recent years, as construction projects have increased in size and owners have tightened schedules, shifted risk and increased their liquidated damages for any unexcused delays, some have questioned whether subcontractor bonds can continue to meet contractors’ business needs. This session will explore the bond forms and business practices that both promise and suggest that the answer is “yes.” As the speakers will explain, bond forms can authorize a significant measure of self-help without depriving sureties of their opportunity to investigate.
- Courtney Walker, Berkshire Hathaway Specialty Insurance Company
- Stacy Hipsak Goetz, Liberty Mutual Surety
- Stan Halliday, Travelers Bond & Financial Products
- Robert Majerus, Hensel Phelps
Breakout Session 9: CGL Coverage for Construction Defects
Drawing the Right Lines: The Dichotomies that Lie at the Heart of the “Business Risk” and Property Damage Exclusions to Commercial Liability Coverage (CGL) for Construction Defects
While the exotic debates over the “occurrence” trigger and contractually “assumed” liability capture most of the headlines, the property damage and “business risk” exclusions to CGL coverage continue to decide most of the CGL claims for construction defects. During this session, the speaker will walk everyone through this alphabet soup of exclusions, including exclusions j(5), j(6), k, l, and m. He will identify and explain the dichotomies that lie at the heart of each one, including the key distinctions between “operations” and “completed operations,” between “your product” and “your work,” and of course, between “physical injury” and “loss of use.” In the process, he will also share his straightforward and yet effective way of thinking about these exclusions and assessing whether they apply.
- Patrick Wielinski, Cokinos | Young
Breakout Session 10: Hidden Responsibility for Design
Playing Hide and Seek: Where and How to Find the Design Responsibility (and Attendant Risks) All Too Often Hidden in Today’s Complex Contracts
In today’s world, design-build and EPC contracts are far from the only contracts shifting design responsibilities and the attendant risks to construction contractors. Complex construction management and even lump sum contracts can also shift such risks. Sometimes the operative language lies in the contract itself. On other occasions, the problem lies buried in a specification or drawing. And on still other occasions, the problem is the unintended by-product of gaps in the design documents and a tight schedule. This session will revolve around several fact patterns that contractors and their lawyers have actually encountered. The discussion of these patterns will reveal where and how construction management and event lump sum contracts can also shift design risk. The speakers will also address the contract review and other policies, protocols, and procedures that can collectively flag an obscure risk of design responsibility.
- Kenneth Rubinstein, Preti Flaherty
- Paul James, BOND Brothers
- Doug Ware, Suffolk
Breakout Session 11: Additional Insured Endorsements
Staying on Top of AI Endorsements: The Issues that Seem to Merit the Most Attention, Including a Hard Look at the Burlington Case, Where the New York Court of Appeals has Addressed the Question of Causation
This session will begin with a review of the most frequent reasons why construction contractors find themselves without the AI coverage they expected to have. The speaker will also share any recent guidance that the courts have provided on such common problems, including privity of contract, priority of coverage and the additional insured’s right to independent counsel. The speaker will then turn his attention to the Burlington case, where the New York Court of Appeals has rewritten the rules on causation in significant ways that are likely to influence other courts across the country. This decision has left many construction contractors with new doubts about how to prepare and submit claims for AI coverage and whether, at the end of the day, they will get it.
- Jeff Vita, Saxe, Doernberger & Vita
Breakout Session 12: Silica Standard’s Broader Implications
Getting Beyond OSHA: The Ripple Effects that OSHA’s New Silica Standard Is Likely to Have on the Legal Environment, and in Turn, the Insurance and Construction Industries
The conventional wisdom is that OSHA’s new silica standard will increase the typical construction contractor’s cost of risk. The speakers will identify the legal and other reasons why that could be true. From legal, insurance and operational perspectives, they will also suggest strategies for dealing with the new environment. The currently open questions are many. How greatly is the new standard likely to increase the risk of workers comp or tort liability for the health effects of exposure to respirable silica dust? Is it too much to suggest that such dust is the new asbestos? Is it appropriate and practical to require all subcontractors to carry pollution liability insurance? Come listen and participate in this discussion of the broader ways the new silica standard is likely to affect the insurance and construction industries.
- Paul Messenger, American Global of Texas
- Phil Beck, Smith, Currie & Hancock
- Kevin Barry, XL Catlin
- Michael Baker, American Global of Pennsylvania
- Jeff Slivka, New Day Underwriting Managers