By: Adv. Luiza Matatov
Murphy’s Law rears its head everywhere, including in the construction industry. However, whilst a piece of bread which falls on the floor on the buttered side ends with a quick wipe, mishaps in construction projects can lead to severe injuries and even death. We would like to cite a case of a contractor, one of our clients, who almost learnt this lesson the hard way.
Several months ago we contacted the client, a building contractor, to notify him that his Professional Indemnity and Products Liability policies are up for renewal. The contractor told us he would think about it, although with the awareness of the risks to which he is exposed, we invited him to a meeting in our offices before he puts his renewal notices at the bottom of the pile.
Murphy’s Law: The balcony that collapsed and the contractor who almost lost everything
“I’ll think about it”?
The contractor met with senior personnel in our offices who explained to him the ramifications of not renewing Professional Indemnity and Products Liability policies.
We emphasised the scope of the insurance covers, the various risks to which he is exposed, and the fact that policies on a claims-made basis only cover claims arising from events which both occur during the period of insurance (or retroactive period if included) and are also reported to the insurers during the period of insurance. We explained to the contractor that claims under these types of policies can potentially run into millions, especially if they involve bodily injury or death.
Despite all efforts and the examples we cited from more than 35 years’ experience, the contractor remained sceptical and left the meeting saying “I’ll think about it”.
The miracle in the building that almost ended in a catastrophe
Fate takes it course and a few days after the meeting, a child leaned on a balcony in the building our contractor has built. The balcony suddenly collapsed and it was a miracle that the child didn’t fall. The contractor contacted us immediately in a panic (quite rightly so) and now realised how important it is to renew Professional Indemnity and Products Liability policy every year.
Were it not for the miraculous outcome, if the child would have fallen to his death or suffered an injury, the contractor, without any insurance cover, would have been directly sued without anyone to turn to for insurance cover. Such a claim could easily have reached millions of shekels, especially in view of the “Lost Years” doctrine in Israeli case law, a subject we have touched on in other articles in our site. It’s clear that a claim of this type could cost the contractor very dearly and lead to a financial catastrophe that would be very hard if not impossible to recover from.
To conclude,
Don’t say “It won’t happen to me”. Murphy also rears his ugly head in the construction industry and the financial consequences can be unimaginable. Arranging insurance, tailored to the needs of the contractor, and renewing it each year to maintain continuity of insurance, gives you the peace of mind you need to cope with the unexpected.
