Masonry Magazine January 1965 Page. 28
Insurance For Contractors
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surance agent, the choice of markets available to him and other factors.
COMPREHENSIVE GENERAL LIABILITY
The following analysis refers to the standard Comprehensive General Liability Policy form used by member companies of the National Bureau of Casualty Underwriters. Similar, in some cases identical, forms are in use by most other insurance carriers as well. For a minimal additional premium, it provides considerably more automatic protection than is available in schedule Manufacturers or Contractors Liability Policies.
The major difference is in the Bodily Injury and Property Damage Insuring Agreements. Schedule forms indicate in specific terms what is insured; the Comprehensive Policy covers all business operations of the insured except those excluded, making it much broader. Five distinct coverages are combined in a single package as follows:
DIVISION I Operations-Premises Liability
Covers legal liability for bodily injury or property damage caused by accident and arising from
(A) buildings or premises owned or leased by the insured
(B) operations of the business anywhere in the United States, its territories, possessions or Canada.
Rating basis, usually per $100 of payroll.
# Example No. 1
Premises Liability
A boy, attracted to a wood pile in our contractor's supply yard, fell and was injured. The insured's Premises Coverage provided for defense and settlement of the ensuing claim.
# Example No. 2
Operations Liability
A carpenter, while working above grade at a job site, dropped a tool onto that same unfortunate boy playing below. The employing contractor's Operations Coverage similarly defended and paid the claim.
DIVISION II Elevator Liability
Automatically covers the insured's legal liability for bodily injury or property damage caused by accident and arising from ownership, maintenance and use of elevators owned, controlled or operated by the insured, a hazard not included in the basic Operations-Premises section. Rating basis, usually number of elevators.
# Example No. 1
A defective elevator on premises owned and occupied by a contractor for office and warehouse purposes fell several stories, causing serious injury to two occupants, one a visitor and the other an employee. Elevator Liability Coverage took care of the former Workmen's
THE AUTHOR
Walter T. Derk is Assistant Vice President of the Fred S. James & Company, national brokerage firm with headquarters in Chicago. He has over 19 years of experience in the casualty insurance field and is one of the leading national speakers on this subject. Mr. Derk has lectured architectural classes at the University of Illinois on the subject of contract specifications and is the author of many comprehensive articles on insurance.
Compensation Insurance the latter.
# Example No. 2
Derk
Entering the same elevator with his familiar looking son, our visitor tore his coat on the latch of an automatically closing door. Elevator Liability Coverage paid for the damage.
DIVISION III Contractors' Protective Liability
Owners' Protective Liability
Covers the named insured's legal liability for bodily injury and property damage caused by accident and arising out of operations performed by an independent contractor. When a Comprehensive Policy is issued to a contractor, automatic insurance is provided for the contingent or secondary liability which may result from sublet operations. Issued to a property owner, the same contingent coverage is called Owners' Protective Liability, providing protection for injury or damage claims caused by a general contractor or any of his subcontractors. This latter form is discussed in connection with Hold Harmless Agreements.
If care is taken to see that all contractors on a given job are properly insured, one may question the need for this coverage until it becomes apparent that it is common practice for plaintiff's attorneys to name all possible parties in an action for damages. Owners and contractors may expect to be drawn into litigation for accidents allegedly caused by the negligence of a subcontractor and, even assuming that the sub has adequate insurance to cover the loss, defense fees for the other parties could be costly indeed. Premium rates take into account the existence, in most cases, of such primary insurance for the sub.
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MASONRY . January, 1965