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Insurance solutions for the construction and property industry

Extending your insurance cover to include personal liability. Important and advisable, otherwise it can cost you dearly.


Personal liability insurance? Wouldn’t you think that this is included automatically in your Contractors All Risks or Professional Indemnity insurance policy? Well, not exactly and not always. Not all policies in the construction industry include an automatic extension for personal liability of the type that be found in the Employers Liability section of the BIT 2013 Contractors All Risks policy.

So why it is so important? Almost everyone involved in the construction project – from the upper management echelon (CEO, deputy CEO of construction, deputy CEO of engineering) through to the corporate level (principal, developer, directors and officers, company shareholders) and down to the executional level (foremen, project managers, building contractors and turnkey contractor) can potentially find themselves exposed to a claim for personal liability.

But why? Since plaintiffs usually sue everyone even remotely involved and leave the courts to address the question of liability and its apportionment. The liability can be manifested in two ways: civil or criminal. If you don’t have the appropriate extensions under your various liability policies, then read on:

 

We suggest you contact us with a view to adapting your insurance policies to include essential extensions including cover for personal liability for the entire staff team in the organisation – management, commercial and executional.

This extension provides you with cover for legal defence costs in the event of criminal liability and provides extended cover for financial losses in the event of personal tort liability, subject to the policy conditions.
 

The entire staff team in the organisation –
a term that needs to be elaborated on:

This term exacerbates the importance of an extension for personal liability first and foremost for directors and officers in construction companies, partnerships of developers and other organisations. Why? Over the last few years there have been several amendments to the safety regulations, placing a much greater level of personal responsibility on management officers such as developers, directors, shareholders, owners of construction companies, CEOs, contractors and more.

This measure arises from the perception of the legislator that organised procedures are essential to ensure that the proper safety means are implemented at construction sites. It is the responsibility of the management echelon to provide adequate and safe work conditions, and if they fail to do so – they are exposed to legal action or criminal charges on a personal level. This is an important issue.

An especially important point
This point has already been mentioned several times in this site, thereby exacerbating the issues that should be given specific attention when arranging insurance policies for the construction industry, namely personal liability insurance. According to statistics, there are around 6,000 injuries and 50 deaths a year in accidents on construction sites in Israel, some of which have made headlines in the media. As insurance agents dealing with work accidents at construction sites on a regular basis we can categorically state that these figures are probably vastly underestimated.

Now that we have established that the law takes a much stricter attitude to personal liability arising from accidents, it is clear why I urge you to review your existing insurance portfolio and adapt it to include suitable extensions for personal liability.
 

The list of scenarios that a Professional Indemnity policy covers does not necessarily include personal liability. This is all the more true in the case of a policy covering a property development company or building contractor and applies to other policies as well. Anyone involved in the construction industry is well aware of the fact that damages at construction sites – either to property or bodily injury – can be very costly. An extension of cover for personal liability provides you with the cover for costs…

 
 

A Contractors All Risks policy is the basic policy for any construction project and is comprised of three sections: Property Insurance, Third Party Liability Insurance and Employers Liability Insurance. However, as we have said, not every policy includes an automatic extension for personal liability and even if it does, it is advisable to ascertain whether the extension applies to all sections of the policy. A small amendment to your policies can make a very big difference…

 
 

Products Liability Insurance covers damages arising from defects in the product – namely the building or any part thereof after the project has been handed-over and the project starts to be used. An extension for personal liability cover should be specifically included under such a policy since it is not an automatic feature of a Products Liability policy. It is important to bear in mind that Products Liability involves a long exposure period of between 10-20 years. During this long period of time (or “tail” in professional jargon) if you have no insurance cover and extension for persona liability, the risks…

 
 

Do you need Contractors All Risks insurance or further information?
Call us on 972-3-6951414
contact us by e-mail:
itzick@simon-ins.co.il
or complete the form and we will contact you as soon as possible.

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PERSONAL LIABILITY