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Susan
Bryan,
AIC,
ARM
Ms. Bryan
currently acts
as the
Regional Underwriting Manager for all excess
construction liability coverage for the Western Region at AIG/American Home. This
Regional
Underwriting
Manager
includes underwriting
both wrap-up and
program coverages for a wide variety of
developers, contractors and trade subcontractors involved in all types of construction
Construction
Specialty
Excess
as well as the development
of new products
and coverages for those risks. Ms.
Bryan spent 13 years as an adjuster handling construction defect, complex coverage
and Excess
severe exposures
in the Construction Defect and Major Case Units at Aetna and
AIG
Casualty
Royal Insurance Companies. She also spent four years as an insurance broker
specializing in program design and placement construction risks including both
renewable programs and wraps, working with all size of accounts and routinely
consulting throughout the country. Ms. Bryan is routinely consulted for her expertise
in coverage issues and has testified as an expert in coverage litigation and spoken
at numerous seminars and conferences throughout the country.
Alan H. Packer
Newmeyer & Dillion LLP
Newmeyer & Dillion, LLP is a California-based law firm provides a full range of litigation and
transactional services to businesses and individuals, including home builders, real estate development
firms, and others.
Alan Packer is a partner in the firms expanding Northern California office. He has practiced law in
California for over 20 years, most of it representing parties involved in real estate, home building,
construction, and insurance matters.
Mr. Packer represents home builders, property owners, contractors, and business clients in a broad range
of legal matters, including risk management, insurance matters, wrap consultation and documentation,
efforts to coutner solicitation of homeowners, subcontract and prime contract documentation, as well as
complex litigation matters involving construction projects, product defect claims, construction defect
claims, cost recovery actions, additional insured coverage matters, and creative dispute resolution. He
also handles mechanics lien, stop notice, real estate, and payment and performance bond issues in
residential and commercial contexts.
Todays Topics
Construction
Industry Risks
Catastrophic
Risk
Sources of exposure
cranes,
heavy machinery,
height exposures,
failures of structural components
that can lead to collapse hazards
Falls,
Electrocution,
Heat-related deaths
Pollutants (asbestos and others)
Lots of other causes
Other losses
Property damage
Business interruption
Delay damages
Multiple bond claims
Catastrophic Risk
Catastrophic Risk
Catastrophic Risk
Catastrophic Risk
Bridge collapses
Losses potentially
insured:
Personal injuries
Death
Property damage to bridge
Property damage to
vehicles
Business interruption
losses
Replacement costs
Multiple bond claims
Inspectors
Retrofit contractors
Design professionals
Construction managers
Original construction (even
decades later)
Catastrophic Risk
Band
Promotors
Landlord
Pyrotechnics
Contractors who installed flammable
foam
Building contractors
Construction Defect
Exposures
Strict liability
Expansion of residential claims
Attorney solicitation
Continuing exposure issues (Montrose)
Efforts at liability reform (SB 800)
Inherently uneconomic litigation models prior to wraps
Impact of wraps
Potential liabilities
Milstein
Kasdan
Shinnick
& Ryan
Sample
Complaint
Sample CrossComplaint
Sample CrossComplaint, p. 2
Occurrence typically
means an accident,
including continuous
or repeated exposure
to substantially the
same general
harmful conditions.
History of Wrap-Ups
Benefits of Wraps
Wraps Underwriting
complications
Underwriting information on insureds
Setting premiums
Differing types of projects
Mixed use vs. conventional projects
Aggregates and limits
SIRs and deductibles
What happened to the loss history?????
AB 2738
Example
Builder
Looking Forward
Current Market Conditions
Foreclosure activity
Safety concerns
Attractive nuisance issues
CalTrans example
Ownership & completion
Impact on:
SIR payments
Premium payments
Quality of ongoing warranty reponses and resulting impact on
claims
EIFS
Hardboard siding
Shakertown siding
Centaur pipe
PEX pipes/Kitec fittings
Atlas Shingles
Foreclosures
Falling values
Bankruptcies of developers, trades
Huge public works dollars
Exposure on wraps vs. non-wrap; feasibility of wraps
Questions?