Subcontracting In The Construction Industry And Who Is Responsible For The Injured Employee?

Ryan M. Hathcock | Drew Eckl & Farnham, LLP | December 5, 2018

The current trend in the construction industry involves the acquisition of specialized laborers and contractors to perform the various tasks required to complete each aspect of a given project. General contractors obtain the services of subcontractors as a common business practice to help construction projects become completed more efficiently. Often, these subcontractors are more capable of performing the specialized work, and in many ways, the construction industry is a subcontractor-driven industry.

The addition of subcontractors to a construction project brings additional workers hired by each subcontractor. In the event a subcontractor’s employee is injured in the performance of the work at the construction site, a question arises of who may be held responsible for payment of workers’ compensation benefits for those injuries.

Statutory Employment

A “statutory employer” is an entity that may be held liable for workers’ compensation benefits for injuries to a subcontractor’s employees. O.C.G.A. § 34-9-8(a) specifically lists the entities that may be considered statutory employers under the Workers’ Compensation Act and may liable for workers’ compensation benefits to an injured employee. That list includes principle contractors, intermediate contractors, and subcontractors. After identification of the appropriate immediate and statutory employers that may be held liable, the next question is determining which party is responsible for payment of any workers’ compensation benefits.

Under O.C.G.A. § 34-9-8(c), the immediate employer remains primarily liable for compensation, and the statutory employer is secondarily liable. In order to obtain workers’ compensation benefits from the statutory employer, a claim for benefits must first be brought against the immediate employer. If the immediate employer is uninsured or insolvent, the injured employee may then seek benefits from the statutory employer. In those situations where the statutory employer is held liable, the Georgia Workers’ Compensation Act allows the liable statutory employer to recoup their losses “from any person who, independently of this Code section, would have been liable to pay compensation to the injured employee or from any intermediate contractor.” O.C.G.A. § 34-9-8(b). Although there is an avenue for recovery for the statutory employer to recoup its losses, it may be impossible to recoup any losses from an insolvent immediate employer.

Employer/Employee Relationship Requirement

The Workers’ Compensation Act requires most employers with three or more employees to carry valid workers’ compensation insurance. Too often, one or more subcontractor fails to obtain and carry workers’ compensation insurance. Even if a subcontractor does not have three or more employees and does not obtain workers’ compensation insurance, the general contractor can be held liable for workers’ compensation benefits as a statutory employer. In those circumstances, the general contractor assumes liability for workers’ compensation coverage for the subcontractor’s employees injured on a general contractor’s project.

The polarity of that is O.C.G.A § 34-9-8 will only apply if the injured individual is an employee of his actual employer. While it has been determined that O.C.G.A. § 34-9-8(c) allows an employee to recover workers’ compensation benefits from the statutory employer if he is unable to recover those benefits from his direct employer, the injured individual cannot recover those benefits if he is not an actual employee. Thus, an injured individual will be unable to recover benefits from the statutory employer if he was working for his direct employer as an independent contractor.

Statutory Employer Tort Immunity

The Georgia Workers’ Compensation Act allows for medical treatment and lost wages to an injured employee without the need to prove fault of the employer (who may not be at fault at all). As a result, the injured employee gives up the right to sue his immediate employer and all other statutory employers for the injuries sustained on the job.

The obligation to pay workers’ compensation benefits provides immunity from tort claims arising from the same accident to all entities upward in the contractual chain between the principal contractor and the immediate employer. With that said, immunity does not extend to employees of the principal contractor. Immunity protection to a statutory employer is prompted by the statutory employer’s potential liability for workers’ compensation benefits even if the statutory employer (i.e. principal contractor) does not ultimately have to pay any benefits in connection with the workers’ compensation claim.

Third-Party Property Owner Liability

A property owner is not ordinarily a “statutory employer” under the Workers’ Compensation Act. However, an owner or an entity in control of the premises where an employee is injured may be subject to workers’ compensation liability as a statutory employer, “in the isolated situation where the party also serves as a contractor for yet another entity and hires another contractor to perform the work on the premises.” Creeden v. Fuentes, 296 Ga.App. 98(1), 673 S.E.2d 611 (2009) (citation and punctuation omitted). In other words, an owner or entity in control of property may be subject to statutory employer liability if that entity also functions as a contractor for another entity and hires a subcontractor to perform work on the premises. The corollary of this is that where the owner is potentially liable as a statutory employer, the owner is also entitled to tort immunity due to the exclusive remedy doctrine.

Practical Considerations for General Contractors

The Georgia Workers’ Compensation Act provisions regarding contractor-subcontractor relationships are designed to create a safety net for any injured worker to assure benefits will be paid by someone. General contractors are responsible for providing workers’ compensation coverage to their own employees, but they may also have additional exposure in instances where their subcontractors have not obtained coverage for the subcontractor’s employees. For a general contractor (i.e. statutory employer) to avoid being held financially responsible for another entity’s employees, it is essential that the general contractor protect itself by requiring every lower tier contractor to carry workers’ compensation coverage. In addition to statutory requirements, workers’ compensation coverage can also be contractually required. This verification process often fails through the life of a construction project as numerous subcontractors come and go. However, the cost to upstream contractors in the event of a workplace injury can be substantial.

The Nation Council on Compensation Insurance (NCCI) maintains an active list that allows for verification of workers’ compensation coverage for any company. General contractors are often not aware of the service provided by NCCI that could greatly limit their exposure in workers’ compensation matters. Aside from regularly checking the NCCI database, general contractors could ensure compliance by contractual language requiring for verification of coverage by providing valid certificates of insurance at each subcontractor pay request. Certificates of insurance should not be consider absolute verification of valid insurance, given that inaccurate or fraudulent certificates of insurance may be prepared. Checking directly with the insurance carrier to confirm proper insurance is held is always the best practice.

Work injuries in the construction industry are more common than in any other industry. Requiring all subcontractors down the contractual chain to obtain valid workers’ compensation insurance will prevent situations in which the general contract will be forced to accept responsibility for claims and reduce the number of instances in which they will tap their own insurance for coverage. In theory, a contractual requirement for subcontractors to present workers’ compensation coverage seems simple. In complex construction projects with numerous subcontractors and an ever approaching deadline, the need for skilled and efficient labor sometimes overrides a thorough examination of a subcontractor’s insurance coverage. Unfortunately, that mistake can become extremely costly as general contractors will assume liability for workers’ compensation benefits for injuries to an employee it did not directly hire.

Concussions Aren’t Just a Risk for NFL Players: Hardhats versus Safety Helmets

Fisher Phillips | August 25, 2018

While recently meeting with a group of contractors, I noticed that three large general contractors were requiring their employees to wear safety helmets instead of traditional hardhats, despite the approximately $120 cost per helmet. Futuristic Kask helmets were the helmet of choice. Kask states that the helmets satisfy ANSI Z89.1-2014. Technical specs. Arguably the most important aspect of the helmet was the chin straps.

I also had recently noticed a LinkedIn post by Flintco’s Flint Howard, championing helmets versus traditional hard hats:

In the spirit of the Flintco Ethos: “I believe that mediocrity is unacceptable”, Flintco is launching a pilot program that will introduce the use of helmets to help champion positive changes in our industry.

A week later I was teaching a masters class at Georgia Tech and learned from an attendee that his large specialty contractor had switched to helmets because a number of their large GCs demanded them.

While this seemingly sudden surge in helmet usage may seem abrupt, interest in helmets has been steadily growing since NIOSH posted on March 21, 2016 that 25% of Construction injuries between 2003 and 2010 resulted from Traumatic Brain Injury (TBI). (The full study was published in the March 2016 issue of the American Journal of Industrial Medicine.

United Rental described in a November 15, 2017 article why some contractors are moving away from traditional hardhats, and quoted Jason Timmerman, EHS director for Skanska Commercial Development:

[A traditional hardhat] is only good for something being dropped and hitting you directly on top of your head. It has nothing to do with slips, trip and falls on the same level, where your head snaps backs, or falling off ladder, falling off a wall form. With any type of fall you have, the traditional hard hat will more likely than not fall off.”

While adding a chin strap to a hard hat could help it stay put, helmets being tested and used by Skanska and other construction companies, which come with straps, also offer frontal, rear and side impact protection thanks to foam padding.

The article also quoted Seth Randall, a division safety director for Clark Construction on why their self-perform group was rolling out approximately 3500 helmets:

“We’ve already seen positive results in a couple of incidents that have occurred, that the helmets have potentially saved an employee from any type of head trauma,”

In talking with contractors who have started using such helmets, they said that construction workers are a conservative lot and some employees carped about the new helmets, claiming they were too hot or that the strap annoyed them. One employee said that workers at another contractor teasingly said they looked like bicycle couriers, although there may have been a few more adjectives thrown in.

As Randall acknowledged,

“for some employees, the helmets, which are larger than hard hats, took some getting used to. “It’s a different type of fit, and some people prefer one or the other, but we are getting positive feedback about the fit,”

Randall explained that Clark educated employees on the importance of wearing the helmets for their safety and advised that as “they wear it, they’re finally realizing that it’s also a lot more comfortable as well.”

Bruce Rolfsen’s July 2017 article, Safety Helmets are replacing Hardhats on Construction Sites explained that helmet purchase costs could be an issue for small builders and subcontractors.

For head protection, an OSHA rule (29 C.F.R. 1926.100) requires employers to provide head protection equipment that meets or exceeds the industry consensus standard ANSI Z89.1 issued 2009. The agency also requires employers to provide safety equipment free to workers.

Hard hats meeting the consensus standard can be bought for less than $20 each.

Advertised prices for most helmets meeting the standard start at around $110, depending on the specific model. Adding a flip-up visor could be an additional $50. Bulk discounts would reduce costs, but competition also has the potential to lower costs. Kask and the French-based Petzl are among the few companies offering helmets meeting the ANSI Z89.1 requirements.

The cost is an understandable issue for contractors, but to some specialty contractors, they regard the cost as inevitable because most of the GCs to whom I talked are requiring subs to use helmets at their sites.

As to the price, one assumes that other manufacturers will ramp up their own helmets and challenge Kask, who seems to be the gold standard by which the others are being judged.

Before the Slip and Fall: Lease Drafting Guidance for Tenants

Scott R. Kipnis | ICSC

Some of the most prevalent, mundane, and time- and money-consuming claims that tenants find themselves litigating stem from slip-and-fall accidents in shopping center common areas. The lease between landlord and tenant, specifically the allocation of maintenance obligations as well as indemnification and insurance provisions, is often the determining factor of the outcome in such cases. It is determinative of which party’s insurer is obligated to defend the claim. As demonstrated by the analysis of the Second Judicial Department of the Appellate Division of the Supreme Court of the State of New York in Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company (“Atlantic”)[1], specificity in drafting can be key to shielding tenants from liability and effectuating the intent of the parties.

Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company — Procedural background

The tenant, Linea 3 Corporation d/b/a Marilena Imports (“Tenant”), leased space in a commercial building in Rockland County, New York, from Atlantic Ave. Sixteen AD, Inc., (“Landlord”) in which it operated a wedding and party supplies store. In the underlying personal injury suit[2], Tenant’s employee was allegedly injured after falling on black ice in the building’s parking lot while walking from his car to work. The injured employee brought an action to recover damages for his injuries in the Kings County Supreme Court against the Landlord and Universal Strapping Corp. (“Universal”), which operated a business in the same building and was owned by the same principals as the Landlord.[3]

Tenant maintained a commercial liability insurance policy with Valley Forge Insurance Company, and Landlord and Universal had a commercial liability insurance policy from Citizen Insurance Company of America. Landlord tendered the defense of the claim to Valley Forge, which denied the tender. Thereafter, Landlord impleaded Tenant and Tenant moved for, and was granted, summary judgment. Landlord then commenced an action seeking a declaratory judgment action in the Rockland County Supreme Court that Valley Forge and Tenant were obligated to defend and indemnify it in the personal injury action as required by Tenant’s insurance policy and by the indemnification language in the lease.

The Rockland County Supreme Court granted summary judgment in favor of Valley Forge and dismissed the complaint, finding that under the terms of the governing lease neither Tenant nor its insurer had any duty to defend or indemnify Landlord in the personal injury action. Landlord then appealed the decision and sought a judgment declaring that Tenant’s insurance company was obligated to defend and indemnify Landlord in the personal injury action. The Second Judicial Department of the Appellate Division of the Supreme Court of the State of New York affirmed the order of the Rockland County Supreme Court.

Case analysis

In evaluating the merits of the Landlord’s appeal, as well as Valley Forge’s motion to dismiss the action brought in the Rockland County Supreme Court, the courts addressed the following:

  1. which party was responsible for the maintenance of the parking lot under the lease,
  2. the indemnification language under the lease and
  3. the insurance coverage in effect at the time of the alleged slip and fall.

Maintenance and indemnification issues

The lease between Landlord and Tenant provided that the parking lot was a common area outside of the leased Premises and that Tenant had no obligation to maintain the common areas; Tenant’s only obligation was to contribute toward the expense of common area maintenance. Under the lease, Landlord was responsible for common area maintenance, including the removal of snow. The lease further provided that Tenant would “defend, indemnify and hold Landlord harmless from and against any and all suits, claims, actions, damages, loss, expense or liability, including reasonable attorneys’ fees arising out of or in connection with any act or omission of Tenant…arising out of, or in connection with, Tenant’s use and possession of the [leased] Premises.”[4]

Therefore, the Rockland County Supreme Court held that Tenant neither leased the parking lot nor had any responsibility for snow and ice removal. Additionally, Tenant only indemnified the Landlord for Tenant’s acts and omissions in connection with the leased premises, and this indemnification did not extend to the common areas.

Insurance coverage and additional insured status issues

The lease required both Landlord and Tenant to obtain commercial liability insurance. Tenant’s insurance policy included an endorsement covering the Landlord as an additional insured for “liability arising out of the ownership, maintenance or use of that part of the premises leased to [Tenant] and shown in the Schedule”.[5] The schedule stated the specific unit of the building leased by Tenant and did not reference the common areas.

While the Supreme Court Appellate Division held that a party named as an additional insured is entitled to the same coverage as the policyholder,[6] because the additional insured endorsement was limited to liability “arising out of” the “ownership, maintenance or use” of the “premises leased” to Tenant, and since Tenant neither leased nor maintained the parking lot, the insurance policy did not provide coverage for the alleged injury. Therefore, Tenant’s insurance company had no duty to indemnify or defend the Landlord for the slip and fall.

Key points of analysis

Here, the lease was clear that Tenant was not responsible for parking lot maintenance. Further, because Tenant only indemnified Landlord for claims related to Tenant’s use and possession of the premises, which did not include the parking lot, Tenant had no liability for the incident. In addition, Tenant’s liability policy naming Landlord as an additional insured only covered the premises and did not extend to the common areas. Based on the foregoing, and the absence of any allegation that any wrongful act or omission by the Tenant in the common areas contributed to the injury, Tenant and its insurer had no obligation to defend the injured party’s claim.

This case offers practical drafting guidance for tenants to ensure that they are likewise protected, either when sued directly by an injured party or are otherwise forced to defend such claims. By using practical common sense and narrowly defining the premises, setting forth each party’s maintenance obligations with specificity and tailoring the insurance and indemnification clauses as described below, tenants can take steps to protect themselves from the pitfalls of having to litigate personal injury claims.

Lease considerations when drafting

Define what you are leasing. The lease should expressly identify what constitutes the premises as distinct from the common areas. “Common areas” should be defined comprehensively to account for all existing improvements, and should also be broad enough to encompass all areas provided by the landlord for the common use of the tenants of the shopping center and their customers. Especially significant in the context of slip and falls, the lease should specifically define sidewalks as part of the common area, and not part of the premises. The differentiation between common areas and premises and narrowly defining what constitutes the “leased premises” is critical when it comes to each party’s insurance coverage, even where the tenant may be responsible for maintenance and repairs, as further discussed below.

Maintenance and repair obligations. The lease should unambiguously set forth the maintenance obligations of each party with respect to the common areas and the premises. Unless the parties have negotiated for the tenant to be responsible for performing certain common area maintenance or repairs, the lease should state that the landlord shall be solely responsible for maintaining the common areas. It should further discuss in detail what such common area maintenance entails, i.e., routine sweeping, seasonal plowing and snow and ice removal from both parking and sidewalks adjacent to or in front of the storefront. By including such details, it leaves little room for allowing the landlord or the injured party to advance the argument that such items are the responsibility of the tenant or impose obligations on the tenant that were not contemplated by the lease. To further protect a tenant from unbargained-for liability, the lease should expressly state that the tenant shall have no obligations with respect to maintaining the common areas, other than to reimburse Landlord, or, as applicable, that any reimbursement obligations are captured in the base rent.

Indemnification. As demonstrated in Atlantic, courts will look at the indemnification provisions of a lease to determine whether either party has agreed to indemnify or defend the other in such actions. When maintenance of the common areas is a landlord responsibility, a tenant will want to make sure that the landlord holds the tenant harmless and agrees to indemnify the tenant from and against all claims that arise in such common areas. The indemnification language should be clear that the landlord is responsible for anything that occurs outside of the premises or within the common areas of the shopping center, and that the tenant can in turn indemnify the landlord for claims arising inside the premises. While there can be a carve-out for claims resulting from one party’s negligence or, preferably, gross negligence, where a tenant is not responsible for common area maintenance, it would have to take some action that contributes to the condition causing the party’s injury in order for a negligence claim to prevail.

Insurance coverage and additional insured status. Under the lease, both parties should carry commercial general liability insurance parallel to their respective indemnification undertakings. In accordance with the above, the landlord should be responsible for insuring the shopping center, including the common areas, and the tenant should insure the narrowly defined premises. Most significantly for the foregoing, and equally as important as having insurance coverage in the first place, is making sure that each party names the other as an additional insured in its respective policy. As noted by the court in Atlantic, a party named as an additional insured is entitled to the same coverage under the policy as though it were the named insured. Simply put, the landlord should name tenant as an additional insured for the common areas, with such coverage being primary and noncontributory other than for gross negligence; and a lawsuit can be avoided.

Landlord insuring tenant’s risk. Where the tenant is responsible for common area maintenance, it should still attempt to have the landlord insure the common areas in order to limit its exposure to liability. Other than with regard to New York’s unique vicarious liability rule, the landlord will want to carry its own commercial general liability insurance covering perils unrelated to the tenant’s negligence, such as negligent design of the parking lot.[7] In situations where the tenant is in care, custody or control of the common areas but the landlord is insuring the risk, to avoid any doubt that the tenant is entitled to such coverage, the lease should expressly state that the landlord’s policy is intended to cover any common area maintenance that the tenant is required to perform. To further ensure that the tenant has an enforceable claim to coverage, the lease should be clear that the cost of such insurance is either included in the base rent or is otherwise being paid by the tenant to the landlord. The lease should also clarify that the tenant is required to be named as an additional insured and should specify that such coverage is primary and noncontributory. Having primary and noncontributory coverage in place eliminates the question of who is negligent, analogous to the waiver of subrogation (a concept born in New York to effectuate the public policy that landlord and tenant should not fight among themselves concerning an insurable loss). This also prevents the tenant from being deprived of coverage for which it has bargained due to a reconciliation process between the parties’ insurance carriers as to whose negligence caused the accident. Having the “primary and noncontributory” language in the lease related to the common areas protects the tenant as an additional insured, since the landlord’s carrier cannot seek contribution from any other policy unless the claim exceeds the amount of landlord’s coverage.

Conclusion

The facts of each specific case may ultimately determine the tenant’s liability. However, tenants can take steps toward limiting their exposure to claims resulting from slip-and-fall accidents in shopping center common areas by negotiating the provisions described above.


[1] Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company, 150 A.D.3d 1182 (2d 2017).

[2] Raven v. Universal Strapping Corp., Supreme Ct. Kings Co. Index No. 4126/2011.

[3] Workers’ compensation laws would have prohibited the plaintiff from directly suing his employer.

[4] Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Co., Supreme Ct., Rockland Co. Index No. 033887/13. Decision and Judgment dated Oct. 3, 2014.

[5] Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company, 150 A.D.3d 1182 (2d 2017).

[6] Ibid.

[7] Likewise, the tenant should also insure the common areas against comparable perils.

California Supreme Court Rules Broadly in Favor of Insureds

David E. Weiss and Kerry Roberson | ReedSmith | June 11, 2018

On Monday, June 4, 2018, the California Supreme Court ruled that an insurance company must provide liability coverage to its corporate insured against claims of negligent hiring, retention, and supervision of its employee, who allegedly sexually assaulted a 13-year-old child. The case is Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc., Case No. S236765 (June 4, 2018). This decision is “of exceptional importance to injured parties, employers, and insurance companies doing business in California,” wrote the U.S. Court of Appeals for the Ninth Circuit, in an order certifying the issue to the California Supreme Court.

In 2002, Ledesma & Meyer Construction Co. (L&M) entered into a contract with the San Bernadino School District for a construction project at a local middle school. L&M hired Darold Hecht to work on the project. In 2010, a 13-year-old student at the school (Jane Doe), filed suit asserting numerous claims against L&M, alleging that she was sexually abused by Hecht. One of Doe’s claims against L&M alleged negligent hiring, retention, and supervision of Hecht. L&M’s insurer, Liberty Surplus Insurance Corporation, agreed to defend L&M under a reservation of rights.

Liberty sought declaratory judgment in federal court that Liberty was not obligated to defend or indemnify L&M against Doe’s lawsuit, arguing that L&M’s negligence did not constitute an “occurrence” under the commercial general liability policy. The policy provided L&M coverage for liabilities arising from “bodily injury” caused by an “occurrence.” The policy defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The District Court held that Liberty was not obligated to defend or indemnify L&M in the underlying action because L&M’s negligent hiring, retention, and supervision of Hecht was “too attenuated from the injury-causing conduct” of Hecht to fit the policy definition of “occurrence.”

L&M appealed to the United States Court of Appeals for the Ninth Circuit, which then issued an order certifying the issue to the Supreme Court of California. The Ninth Circuit sought guidance because “California law [wa]s unsettled in this area,” and because of the “significant precedential and public policy importance” of the outcome. The Supreme Court of California agreed to answer the following question: “When a third party sues an employer for the negligent hiring, retention, and supervision of an employee who intentionally injured that third party, does the suit allege an ‘occurrence’ under the employer’s commercial general liability policy?”

The Court explained that the term “accident” in liability insurance policies in California is a settled matter. “[A]n accident is ‘an unexpected, unforeseen, or undersigned happening or consequence from either a known or unknown cause” and refers to the conduct of the insured. Additionally, the term “includes negligence,” which indicates that a policy that provides coverage to the insured for injuries caused by an “accident” includes coverage for injuries resulting from the insured’s negligent actions.

The Court also analyzed the District Court’s decision and determined that the court engaged in faulty reasoning both in terms of causation and its reading of the relevant case law. The District Court determined that L&M’s alleged negligent actions were “too attenuated” from Hecht’s actions to be considered the “cause” of Doe’s injuries. However, this line of reasoning runs contrary to California cases that have recognized that negligent hiring, retention, or supervision can be a substantial factor in causing the harm to a third party due to the actions of an employee.

Additionally, the District Court misplaced reliance on a number of cases to support its proposition that L&M’s allegedly negligent actions do not qualify as “accidents” simply because they did not anticipate the injury to occur. However, the cases that the District Court cited were distinguishable from the case at hand in various critical ways and thus did not support the District Court’s proposition.

Minkler v. Safeco Ins. Co. of America is the controlling authority on this issue (Minkler v. Safeco Ins. Co. of America (2010) 49 Cal.4th 315.) In Minkler, a Little League coach was sued by a player for sexual molestation. The player also sued the coach’s mother for negligent supervision and failure to prevent the molestations in her home. The coach and the mother committed independent torts, but the coach’s intentional actions did not preclude the mother from coverage. Although insurance does not usually cover intentional injuries, the Court stated, “[t]here is no overriding policy reason why a person injured by sexual abuse should be denied compensation for the harm from insurance coverage purchased by the negligent facilitator.”

If the Court had decided in Liberty’s favor, employers would not be covered for claims of negligent hiring, retention, or supervision in situations where employees engage in intentional actions, a result that would be fundamentally inconsistent with existing California case law. For that reason, the court ruled in favor of L&M, stating that, “absent an applicable exclusion, employers may legitimately expect coverage for [claims of negligent hiring, retention, or supervision whenever the employee’s conduct is deliberate] under comprehensive general liability insurance policies, just as they do for other claims of negligence.” This holding protects the reasonable expectations of policyholders and makes clear that the coverage analysis should be focused on the conduct alleged against the particular insured seeking coverage. Thus, if there are claims against multiple actors, the specific claims against each individual actor need to be analyzed separately.

The California Supreme Court’s decision will have implications beyond the employment situation dealt with in the case; for instance, the Court ordered briefing deferred in Travelers Property Casualty Co. of America v. Actavis, Inc., Case No. S245867, pending this decision. In that case, the Court will consider whether Travelers owed its pharmaceutical company insured a duty to defend or indemnify in an action involving underlying claims involving liabilities arising from the sale and marketing of opioids. We will report on that decision as soon as it comes down.

Say What? The Rise Of Criminal Liability For Construction Accidents

Christopher D. Myers and Cheri T. Gatlin | Best Practices Construction Law | May 18, 2018

“To err is human; to forgive divine.” – Alexander Pope, “An Essay on Criticism.”

Last week marked the end of Construction Safety Week 2018, a combined effort by the Construction Industry Safety (CISI) group and the Incident and Injury Free (IIF) CEO Forum. Together these entities are comprised of 80 national and global construction firms, with a goal of promoting safety in the construction industry. Concern for safety is apparent on construction projects throughout the country and world, as evidenced by daily/weekly construction briefings and the familiar “___Days Since a Lost Work Accident” signs. People that work in the Construction Industry know firsthand the dangers and want to see their co-workers go home safely to their families after a long day. In addition, time is money in this business. Safe projects are more likely to be profitable projects due to lack of delays and prevention of claims for jobsite injuries. For employers, criminal liability for job site construction accidents is more and more a concern. Mainstream headlines highlight several cases where construction accidents = criminal charges.

From the well-publicized October 21, 2016 drowning of two construction workers in Boston after a trench in which they were working collapsed, to the March 18, 2018 pedestrian bridge collapseat Florida International University (FIU), which killed 6 and injured 9 more, construction accidents that result in loss of life are commonly viewed as more than “accidents.” There appears to be a trend toward construction incidents being investigated by various agencies for criminal liability. Inevitably, accidents happen in every area of life, from “fender bender” automobile accidents to high profile construction accidents, which result in extensive property damage and, unfortunately at times, loss of life. When, though, is an accident something more?

With regard to the Boston trench collapse, the Suffolk County District Attorney’s office presented evidence of manslaughter against the employer—both as a corporate entity and the company’s owner—related to the accident. There, the deceased were killed when underground materials supporting a hydrant in an allegedly unshored hole they were digging gave way and the hydrant burst, flooding the trench. Prosecutors claim the employer was pushing the men to work faster because the project was behind schedule. Motions to Dismiss manslaughter charges were considered and denied, leaving the employer and its owner subject to criminal prosecution. In an industry where liquidated damages and other pressures lead to acceleration, this is a headline of note.

In Florida, we await all the facts on the FIU bridge collapse, a decision by the Dade County State Attorney’s office on possible criminal action. However, a charge of “Culpable Negligence” could be in play. In Florida, the crime of Culpable Negligence is defined as a course of conduct “showing reckless disregard for human life, or for the safety of persons exposed to its dangerous effects, or . . . which shows wantonness or recklessness . . . [or] an indifference to the rights of others as is equivalent to an intentional violation of such rights.”

As Construction Safety Week concludes, Burr congratulates all our clients that participated in the activities. Focusing on safety is critical to the industry’s success and the life and livelihood of those who rely upon it.