CDM and Insurance

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CDM and Insurance
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• BHL established 1991
• JN is a chartered insurance broker, and
  MD/founder. Originally trained as a liability
  underwriter but broking Demolition Construction
  risks last 30 years
• BHL clients are solely UK Mainland Demolition
  Demolition related clientele, excepting a couple
  of historical accounts pre-dating BHLs 1991
  formation
• Based in Essex operating countrywide
• Active Associate NFDC members since BHLs
  formation
• Staff all long term newest with us 8 years

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• Full hands on personal approach insistent upon
  client pre-renewal meetings as an absolute
  minimum to ensure we keep up to date with
  developments see many clients more often and
  available to all throughout the year
• 24/7 access
• Specialise in giving the best service possible,
  consistently throughout the year including
  claims
• Insurances are tailored to the individual clients
  we dont accept standard insurance wordings
  unless they are truly appropriate
• Enough about us advert over!

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• CDM is about responsibilities, working together
  and Health Safety be it at pre-planning
  construction daily usage or demolition stages
• Insurance is about funding/compensating when
  things go wrong
• Without insurance business and dependant personal
  lifestyles are at risk

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• How much will an accident cost?
• Insurance is of little interest to most
  particularly the small print until after the
  event! How crazy is that when you consider what
  you stand to lose
• Insurance is not to be commoditised there is no
  such thing as a fit all when considering
  Demolition /or Construction projects

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• CDM defines key roles of Client, CDM
  Co-Ordinator, Designer, Principle Contractor
  Contractor
• My presentation assumes you are either a
  Principle Contractor or Contractor
• On occasions you are likely to fullfil more than
  a single CDM roll ie Contractor, Designer and
  even Client

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• What is a CDM qualifying project?
• 30 working days/500 person days
• so where does the short term site clearance job
  fit in relation to your CDM responsibilities (eg)
• HSE commented that CDM2007 defines a project
  as meaning a project which includes or intended
  to include construction work and includes all
  planning, design, management or other work
  involved in a project until the end of the
  construction phase and for advise/
  interpretation you will need to speak to your
  enforcing authority for health safety
• Withdrawing the requirement that all Demolition
  contracts be notified under CDM2007 could leave
  you and your client in breach

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• Most Contractors rely on their Employers Public
  Liability insurances to protect their Businesses
  and personal lifestyles from liability to
  compensate for injury or damage to people or
  property following an accident
• Traditionally Professional Indemnity insurance
  was felt unnecessary where the Contractor both
  designs and executes the risk assessments and
  method statements with his own or subcontracted
  labour

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• Increased professionalisation of the Demolition
  industry driven by public demand, legislation,
  codes of practise, and compounded by changes in
  policy wordings is beginning to raise questions
  if it is prudent for Contractors to continue
  without PI insurance in addition to EL/PL
  particularly for larger more complex contracts
• A properly arranged and understood EL/PL still
  goes a very long way to protecting your Business
  but recognise its limitations
• EL basic cover
• PL basic cover
• PL advice limitations

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• PI basic cover and Claims Made basis
• Fee charging for advice T3 surveys/ Structural
  engineer schemes
• Practise is changing often subtly are you and
  your insurance broker/adviser aware they need
  to know

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• CDM2007 place PI risk duties on PC, Designers,
  and CDM co-ordinator in particular
• Materiality of PI risk to PC and Contractor RA/MS
  Designer is debateable given likely materiality
  to an accident by the same bodies executing the
  works but watch out for changes in PL wordings
  get your broker to explain by example and in
  detail how underwriters expect to interpret their
  policy wording

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• This is not just about Liability insurance
  Contract Works, Own Hired in Plant also
  relevant
• Remember a standard Contract Works policy
  excludes loss or damage to original materials
  value of this cover often, but not always, is
  negligible
• What about increased costs of working to your
  contract works following an incident after you
  have taken possession?

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• Insist your broker sits down with you on key
  insurances and takes you through the full insurer
  submission and policy wording boring yes but if
  you dont it may cost you everything
• Have your broker put in the insurance input YOU
  put in the demolition input (and that means what
  actually happens on site)

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• On what basis was your EL/PL written statement
  of fact/prop just as material throughout the year
  of insurance as the policy wording
• Insurance is NOT to be commoditised this cover
  in particular must be tailored to your needs
  personally
• Many contractors claim not to understand
  insurance yet fail to use their brokers properly
• A brokers job is NOT just to secure cheapest
  price his primary job is to arrange insurance
  that will protect both you and your Business
  sadly many are failing

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• Hot works lift steels tired employee
• Underground Services
• Bona fide Subcontractors
• Pollution (Bartoline v RSA)
• Liability assumed under contract
• BS6187
• Site inductions
• Safety Policies
• PPEand much much more

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• Dont wait until you have had a disaster before
  doing this eg
• Policy wordings are rarely if ever set in stone
  if they are chances are youre with the wrong
  underwriters
• DONT WAIT UNTIL NEXT RENEWAL DO THE CHECKS NOW

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• Relying on your broker understanding how you
  operate your business can be dangerous to you
• Relying on the FSA is not likely to help you
  either in spite of FSAs constant monitoring of
  brokers and insurers
• Broker terms conditions of business
• I am not being sensational prove it for
  yourselves before you get caught out

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• HSE prosecution cover re EL/PL
• Where to draw the line on what insurances to take
• EL/PL
• 21.2.1 type PL
• Performance Bonds
• Contract Works
• Own Hired in Plant
• Professional Indemnity
• Directors Officers Liability
• Commercial Legal Expenses
• Motor (hazardous locations materials)

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• Insurance is just one of many risk management
  tools available to you to protect you yours
  dont be slow to consider minimising your risk
  exposures by other supplimentary options your
  broker may also be able to assist you here

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• a useful exercise when reviewing any or all of
  your insurances is to have your broker highlight
  to you key limitation and restriction areas of
  your insurances in addition to areas which the
  broker given his understanding of your business
  remain significantly exposed (not just on the
  specific policy but overall)

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• finally how are you preparing for 6th April
  2008 when the Corporate Manslaughter Corporate
  Homicide Act 2007 becomes operative how will
  your insurances protect your Business and
  dependant family lifestyles?

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• Any questions please?