General Contractors manage building projects through the daily oversight of construction activities, vendors, and subcontractors. They make sure that building projects are completed on time, within budget, and compliant with building plans and regulations. Some of these regulations include building regulations, safety regulations, and environmental regulations. A construction project does not have to involve building on contaminated land in order to be subjected to potential environmental claims. Most environmental exposures stem from routine construction activities and often are not visible until they become costly problems. It is the responsibility of the general contractor to have an all-inclusive vision of the entire building project and prepare for any environmental concerns that could affect their employees, the public, and the environment. The following general contractor insurance claims illustrate some of the exposures this class of business may face.

While performing building renovations, a general contractor used gas powered generators and equipment.  The contractor failed to properly vent or contain the emissions from the equipment during operations.  Employees working in a nearby area of the building complained of headaches, nausea and respiratory problems.  The results of an air quality study concluded that the increased carbon dioxide levels in the building resulted from the construction equipment.  The contractor was liable for causing building-related illnesses that resulted in 30 bodily injury claims totaling over $100,000.

A $10 million claim was filed against a general contractor performing renovation of a city building.  The claim alleged negligence in creating unsafe air quality conditions in the ventilation and air filtration systems, causing employees on the premises to suffer serious injuries from inhalation of, and exposure to, toxic fumes and airborne contaminants.

A general contractor was responsible for overseeing the renovation of a hospital wing.  When two patients died in the intensive care unit adjacent to the construction zone, the contractor was sued for inadequate monitoring and containment of the construction zone.  The patients’ cause of death was determined to be an organic fungus found in the ventilation system, and traced back to dusts generated during demolition activities in the construction zone.  The contractor apparently misinterpreted construction drawings with regard to the connection of the duct system for the renovation zone and the intensive care unit.  The general contractor was responsible for $10 million in damages.

A general contractor was responsible for overseeing a sewer rehabilitation project.  During excavation of a trench, the bucket of a backhoe hit a natural gas line.  This forced evacuation of the immediate area, including a small strip mall.  Store owners filed loss of business claims against the contractor, exceeding $75,000.

A general contractor and architect retained a design/build contract for design and construction services to rehabilitate the roof of a retail shopping center.  Half of the roof was replaced before shutdown for the winter.  In January, several stores occupying areas of the shopping center where the roof had already been rehabilitated reported extensive leaking.  One of the shopping center tenants retained an engineer who alleged that the leakage was due to ice damming resulting from inappropriate design.  Damages for the tenant’s business loss and damaged inventory exceeded $500,000.  To be removed from this claim, the general contractor exhausted defense costs in excess of $200,000.

A general contractor installed new carpeting in an office building. One week after the installation, the owner of the office building informed the contractor that employees were complaining of headaches and dizziness. The contractor could not prove that the manufacturers of the carpet or the carpet adhesive were responsible. The contractor filed a claim with their general liability carrier. The claim was denied because the contractor brought the hazardous materials, such as formaldehyde and volatile organic compounds, onto the site.

A commercial developer retained a design/build delivery system for the construction of a multi-story office building. The general contractor’s project manager failed to check the adequacy of the safety netting system installed in connection with the project’s roof installation. A worker fell and sustained injuries, and his attorney alleged inadequate safety controls and monitoring on the part of the general contractor. The contractor’s general liability policy contained a professional services exclusion. The general contractor was responsible for damages exceeding $300,000.

These claims examples have been provided to us by our insurance companies over the years. These represent actual environmental claims they have seen. While the coverages we offer are designed to address these general issues, we make no guarantee or warranty that any individual policy we offer will respond to all issues as described herein. Please refer to the actual policy wording in each offered form to determine coverage applicability and acceptability.