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Perpetual Responsibility and the Risk of Unique Claims

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Major infrastructure developments around the country have helped bring the construction and building industries back to life following the economic downturn. According to recent figures from the U.S. Census Bureau’s Value of Construction Put in Place Survey, more than $900 billion was invested in construction work across the country. As investment in building and construction continues to grow, so does the insurance risks associated with bringing multiple projects to fruition. For the owners, contractors, sub-contractors, architects and engineers who all pull together to take a project from concept to reality, the responsibility does not end when the structure is complete and each face complex and ongoing risk exposures.

Consider the example of a contractor who places a large standing light fixture in a restaurant lounge. One busy evening the light fixture is inadvertently knocked over onto a customer, who collapses after being hit on the head and shoulders.

As a result of the accident, the customer sustains multiple serious injuries including facial scrapes, nerve damage, lower back and hip pain, injury to the neck and shoulder, and post-traumatic stress disorder (PTSD). In addition, the injured customer is diagnosed with a traumatic brain injury (TBI), misses over a year of work and eventually goes on full medical leave from her employer.

On the advice of her lawyer, in the personal injury claim, the customer proceeds not against the restaurant, but against the contractor who provided the light fixture. Even though the light fixture was not in the possession of the contractor at the time of the incident, the customer is allowed to proceed with a claim that alleges that the contractor was negligent and is responsible for her injuries resulting from the light fixture.

While it may seem unlikely, the above scenario is a real example of a unique claim where the responsibility of the contractor did not end at the point of installation. Any employee of a business entity, whether an entrepreneur, professional or contractor, who provides services or places a product into the stream of commerce can face significant exposure in a personal injury liability claim. Once you put the product or service out in the public arena, you become exposed.

To help manage any type of risk effectively, it is important for brokers and agents to develop a comprehensive understanding of their client’s business. Unique claims can occur in a variety of situations, so you must be certain that all aspects of your client’s business are addressed and properly covered by the policy. For instance, consider a customer walking into a mall who catches her shoe heel on a concrete walkway, falls to the ground and sustains a broken ankle. The claimant alleges that she now walks with a permanent limp and in addition to her medical needs, further claims a permanent loss of earning capacity.

In this instance, the claimant proceeds not only with a lawsuit against the mall but also against the contractor who installed the concrete walkway where the fall occurred. As the above example demonstrates, a broker who takes the time to fully understand the needs of their client, will be able to add value and help ensure that no matter how unlikely, a business owner can be covered for every scenario.

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