Masonry Magazine October 1966 Page. 12
DIVISION I:
CONTRACTORS' LIABILITY
Covers the insured's legal liability for bodily injury or property damage caused by an occurrence and arising out of ownership, maintenance or use of premises or operations necessary or incidental thereto. 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-Premises Liability
Deciding to get rid of that troublesome wood pile along with some old paint and other building materials, our contractor set them afire in the building's incinerator over a period of three weeks. Something in the materials being burned caused gradual damage to the paint on the boy's house next door. It was repaired by virtue of the contractor's Premises coverage.
Example No. 3-Operations Liability
A painter, while working on a scaffold at the boy's home, dropped a bucket of paint on the head of someone playing below. The employing contractor's Operations coverage similarly defended and paid the claim.
Example No. 4-Operations Liability
A roof deck contractor's employees allowed a light spray of gypsum-like material to be carried by the wind and drift onto several cars over a period of days. One of them belonged to our boy's father, whose damage was paid for by the contractor's Operations coverage.
DIVISION II:
ELEVATOR LIABILITY
Automatically covers the insured's legal liability for bodily injury or property damage caused by an occurrence and arising from ownership, maintenance and use of elevators owned, controlled or operated by the insured. The definition of elevator does not include a hod or material hoist used in construction operations; these are covered under Division I. 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 Compensation Insurance the latter.
Example No. 2
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 an occurrence and arising out of operations performed for him by an independent contractor, including that arising from the insured's general supervision of such work.
When a Comprehensive General Liability policy is issued to a contractor, automatic insurance is provided for the contingent or secondary liability which may result from sublet operations. Issued to the 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.
This division is becoming more and more important, it seems. Legislation such as the Illinois Scaffold Act and various "Safe place to work" statutes have made it commonplace to sue the owner, general contractor, architect or engineer when an employee of a subcontractor is injured.
It is also common practice to jot down names off the sign out front and sue everybody in sight, so owners and contractors may expect to be drawn into litigation for accidents allegedly caused by someone else. Even assuming that the negligent party has adequate insurance to cover the ultimate loss, defense fees for the other parties could be costly indeed. Thus defense is often the most advantageous and practical feature of the coverage granted under this division.
However, where the work to be performed is inherently dangerous or the damage proves to be a necessary consequence of following contract specifications, more than mere defense may be involved. In such cases, judgments may be awarded against the owner or general contractor even though the work was sublet. This coverage becomes applicable, too, where the subcontractor's primary insurance limits may be inadequate or his coverage entirely void, because of non-payment of premium, for example. Rating basis, usually per $100 of sublet contract cost.
Example No. 1
The owner of a new building under construction required that the general contractor furnish him with an Owners' Protective Liability policy, while the general had a Comprehensive Liability Policy which automatically covered him for sublet operations. An employee of the subcontractor, a roofer, dropped a tool onto an already-bandaged lad below causing injury.
A suit was filed naming all three in complaint. Defense of the owner was provided by the Owners' Protective Policy and the general's Comprehensive Policy in turn assured him of legal representation, while the sub's basic Operations Premises Insurance took care of his defense and ultimately paid the loss.
Example No. 2
An acoustical tile contractor sublet a rush portion of his job to a lather, whose certificate of insurance was delayed for several days. When it did arrive, after an accident had occurred because of the lather's negligence, it revealed bodily injury limits of $25,000 cach person and $50,000 each accident. Both contractors were named in a suit resulting in an eventual judgment of $33,500 to one person. The tile contractor's Protective Liability Coverage provided for his defense and payment of the $8,500 in excess of the subcontractor's policy limit.
MASONRY
October, 1966