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Flying, Driving Robots to Globalization: New excess liability concerns

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Excess liability, umbrella liability, high levels of general liability, whatever increases your limits of unknown liabilities, worries your insurer endlessly.

The modern world of commerce and delivery offers changes in liability just as fast as changes in how business is conducted and life is enjoyed.

Globalization moves labor to foreign lands which do not require many of the costs of employment that domestic manufacturing does. Supply chains may include many foreign countries with far-reaching impacts on liability.

Although superficially this cost savings sounds inviting, foreign governments insist on higher limits of liability for corporate citizenship regarding products and environmental issues.

Domestic carriers can be hesitant to accept new hazards. Foreign carriers are not admitted readily in the United States. Surplus lines carriers are more free to manuscript coverage, but Boards of Directors are less likely to allow non-admitted carriers as insurers.

This conflict can only be resolved by admitting more foreign competition to write what business now views as excess and surplus lines. Business must gain coverage for the most strict liability laws it encounters.

Delivery systems are more likely to include drone aircraft and self-driving vehicles in the near future. The vehicles are testing in several states for the open road now. They commonly deliver internal packages at companies and have done so for years.

Umbrella liability carriers concerns include sharing the skies with commercial passenger and freight delivery aircraft. Can so many signals interfere with or confuse flight controls?

The brave new world has insurance companies cowering and amending standard language to exclude some of these exposures.

With almost everything controlled by computer programs, whether air traffic control or your business' reputation, cyber liability losses are becoming very limit.

Cyber attacks cost millions at a minimum. Diverting a robot, injuring your on-line presence, stealing data all can cause major umbrella losses, and the business liability is allowing itself to be robbed.

Excess and umbrella carriers need to prepare quickly for these new technological conditions. The market will change this decade. 


Advantages of Extended Warranties on Completed Operations

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Warranties provide an assurance to the owner that the contractor's completed work will remain up to a specific standard for a defined period of time. The court system has set this time frame typically as one year in the absence of a written extension.

So to what advantage to you is it to extend that period of time?

Two advantages:

1. You can define the standard for the completed work in writing and have agreement from the owner.
2. You can create a duty for the owner to report potential issues early, becoming part of a process that shifts some of the potential public liability.

Implied warranties use phrases such as "workmanlike manner". Tough to defend that standard because it changes over time, materials, and site conditions. Certainly basements were built in a workmanlike manner prior to radon gas accumulation discoveries. Once that potential issue is part of the equation, "workmanlike" changes.

Sink-swell soils forced a change in foundation design and build.

You can build to an excellent standard today; you cannot predict the future or know everything about the subgrade of the site. Use a warranty to assure the best possible work has been completed with today's knowledge.

Transfer some of the reporting duties to the owner. After all, it is their site and they at least casually inspect it every day. The warranty spells out the conditions for the warranty to be in force. Require the owner to report frost heave in sidewalks or subsidence around drop inlets, or other early warning signs of trouble related to your specialty.

The bottom line is that both parties are better off fixing these problems early rather than after a trip and fall incident or a total collapse of a stormwater structure during a storm.

Consider this approach and discuss it with your attorney. Each state is a bit different in what they allow. If nothing else, these warranties help the owner understand the variables in your work. Reward them with some more time as a bonus for cooperation. 


Utility Marking: who's responsible for errors?

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You've marked the area in white paint where the new guardrail is to be installed. You've called your state utility marking service and wait the required time before sending a crew out to begin work. The supervisor mentions a fiber optic cable marker on site and wonders why the tickets have come back clear. Obviously, you can't proceed until you've double checked these data.

Who would be responsible for cutting a fiber optic cable in this scenario? Even if you didn't know, the test is often "should you have known?" This test requires your site supervisors to check site plats for any utility easements, any visible marking signs within several hundred feet of your site, and interview the marking crew to request specific concerns.

Double check any laterals for water and sewer, is electrical service buried or overhead? How about private utilities - any lighting or signage on site still work?

The site supervisor needs to stake out any areas where extra caution is needed. Great due diligence saves time and money in the long run.

Fencing contractors run into the problem of unmarked or improperly marked utilities constantly. They bore holes to utility depth exactly where utilities turn into the site. They must bore holes every eight feet. The most professional fence installers hit phone and power lines. The key is to document your due diligence.

Take pictures of all utility markings before you dig. If you have any question whether the site has been mismarked or a specific utility has not been marked, take pictures of the markings currently on site, then call for the remark to document the difference.

The key is to have a high level of certainty that you know where the utilities are and they are properly marked. Next, document the efforts made to assure these conditions. Then dig, bore or plunge with confidence, and the knowledge you have done your best to avoid utility interruptions. 


Build Passive Redundant Systems: site design loss prevention devices

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Redundant systems involve anticipating future issues with your building. Do you have mission critical electricity needs, for instance, a hospital? Design a generator into the site.

What issues are raised with generators? Now you must consider a fuel source. An underground storage tank creates compliance issues. More importantly, it creates real problems when they leak. Secondary containment is one answer and should be implemented. (A second physical barrier around the tank which can hold the tanks' volume should it leak.)

Consider installing a radon-type venting system below the slab too. Vapor intrusion is the next step in environmental compliance evolution. The back-up system can be installed for dollars during construction instead of thousands later. And suppose you do spill some fuel after the slab is poured? Wouldn't that be a convenient time for a passive redundant system ready for use?

Rethink each system to anticipate realistic future problems. What part of the solution is practical, yet very cost effective, to install now?

Now, use this skill on the site itself. Silt fencing can be installed with the safety fencing, same posts and trench. Safety fencing around trees can be used for traffic control and defining lay-down space. Traffic control and storage logistics should be managed before the site opens for construction. Use fencing to define flow as well as its primary protection job.

Stormwater detention systems store a valuable commodity, water. Non-potable water has many uses on a job site. Use this source to water freshly installed plants, trees protected on site, dust control, or power washing mud off tires. There are ten thousand other uses, and ultimately, you need to drain those structures. Install a pump with a filter and leave it in the pond.

Rethink the many uses your temporary structures and features can help perform. Don't waste any of them. The design phase tends to be task oriented. Look big picture and synergize your assets.