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Who Else Owns this Construction Loss?
By: Steve Hunt, CPCU, ARM
President and Senior Safety Consultant
The Warren Group, Inc.
Subrogation
Subrogation is often overlooked or not pursued
because the focus is on what the employer or
worker may have done wrong.
Who Else Owns this
Construction Loss?
Purpose:
Provide ideas and tools to assist you in
qualifying construction losses for
subrogation potential.
Learning Objectives:
• How to identify viable subrogation
opportunities
• Techniques for working subrogation cases for
a successful outcome
Why are Construction Losses Unique?
• High Severity losses
• Multiple parties
• Fast moving environment compared to
general industry
High Severity losses?
• Approximately 1,200 deaths and 480,000 non
fatal injuries annually.
• Construction has 6% of the workers but 20% of
the deaths.
• Construction deaths and serious injury rates are
considerably higher than that of other large
groups: Retail, Manufacturing, Agriculture,
Transportation, Wholesale, Utilities, etc.
Source: US Department of Labor
Falls (32.0%)
Other (6.2%)
36a. Distribution of leading causes of deaths from injuries,
construction, 2005
Exposure (13.5%)
Contact w/ objects
(20.0%)
Transportation (28.4%)
Source: Center for Construction Research & Training
50
100
150
200
250
300
350
400
450
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
Nu
mb
er o
f d
eath
s
Fall to lower level Contact with electric current
Highway accident Struck by object
Source: The Center for Construction Research & Training
36c. Leading causes of work-related deaths, construction, 1992-2005
From roof (33%)
From ladder (16%)
Other (25%)
37a. Distribution of causes of deaths from falls in construction,
1992-2005 average
From girder, struct. steel (8%)
From scaffold, staging (18%)
Source: The Center for Construction Research & Training
3.8
1.0
2.1
2.7
2.7
3.1
3.8
4.6
4.7
5.0
6.1
7.5
23.8
38.7
All construction
Plumber
Construction manager
Heat A/C mech
Electrician
Foreman
Drywall
Carpenter
Brickmason
Painter
Welder
Laborer
Roofer
Ironworker
Number of deaths per 100,000 full-time workers
Source: The Center for Construction Research & Training
37b. Rate of deaths from falls, selected construction occupations,
2003-2005 average
Multiple Parties
• General Contractor
• Subcontractors – roofing, masonry, steel
erectors, carpentry, HVAC, plumbing, etc.
• Rental equipment companies – back hoes, lifts, etc.
• Rent and perform companies – Scaffolding erectors, cranes with operators.
• Construction Management Companies Owner
Construction vs. General Industry
• OSHA 1926 - Construction Safety Standards
• OSHA 1910 - General Industry Safety
Standards
Most Cited OSHA 1926
• Fall Protection - Guarding open sided floors / platforms
• PPE – Head protection from impact, falling flying objects
• Electrical – Ground fault protection & path to ground missing or disconnected
• Scaffolding – Guardrails & frames
• Ladders – Various
OSHA – Multi-employer Worksites
• Exposing Employer
• Creating Employer
• Controlling Employer
• Correcting Employer
Safety Standards
• Hazards
• Equipment
• Procedures
• Training
• Supervision
Regulatory and industry best practice
Most Workplace Injuries:
• Are predictable
• Are preventable
• Some safety standard or duty was violated
• All have A CAUSE!
• Most have MULTIPLE CAUSES
Keys to Subrogation
• Determine involvement of all parties
• Determine cause or causes
• Determine responsible parties
Determine Causes and Involvement:
• Someone else created a hazard and it led to
our person being injured.
• Someone else failed to perform and it led to
our person being injured.
• Someone else’s equipment failed and it led
to our person being injured.
Barriers to Cause
Determination and Subrogation
• Late reporting
• Misreporting – initial reports minor incident
• Business relationship
• Other parties involved may not cooperate
Barriers to Cause
Determination and Subrogation
Construction is fast moving
• Physical evidence can get covered up quickly.
• Workers / Witnesses move from job to job, some
disappear.
• Machinery and equipment get repaired and put back
into service.
• Language communication issues
Barriers to Cause
Determination and Subrogation
Your case?
No scene,
No pictures,
No witnesses,
No statements,
No machinery or equipment
Proper Investigation can
Yield Improved Results
Accurate information is needed quickly
1. Detailed descriptions of events
2. Alleged cause
3. Equipment involved
4. Parties involved
5. Witnesses
What information do we need?
• Names – Companies involved, witnesses,
supervisors, etc.
• Photographs
• Secure the scene, if possible
• Subcontractor Contracts
• Copy of Safety Programs for this job
• Safety meeting minutes
What information do we need?
• Accident investigation reports
• OSHA Inspection report
• Construction plans
• Safety inspection reports
• Witness statements
• Key person interviews
Case Study
• Plumber checking pipes falls through
uncovered floor opening.
• Arc Flash burn at Waste Water plant
construction site
I was onsite the following day
Case Study
• County inspector falls when walk board gives
way over 14 foot hole.
No onsite completed – only 5 photographs provided
Case Study
• Mason drops concrete on electrician from
three stories up
No photographs due to limited initial investigation
I was hired 2 years after the incident
Case Study
• Roofer’s laborer falls through unguarded
floor opening.
Onsite one month after fall
Case Study
• Fall off of a Metal Roof
No onsite or onsite photographs but good information from
witness statements and depositions.
Case Study
Conclusion
• Responsibility is not always clear cut.
• Rarely do we get everything we would like to
have, but sometimes it is enough to achieve a
positive outcome.
• The more thorough and timely the
investigation, the better the outcome.
Questions?
Presented at Selective Insurance Claims Adjusters
2010 Annual Conference, Hershey, PA
Source: E-mail safety contest joke series
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