December 11, 2013

Two Construction Coverage Enhancements Worth a Second Look

Accidents happen. A construction manager could have accidently caused a wrongful act or their client perceives that they performed a wrongful act. This of course, is why you carry insurance. But what happens when you are pulled into a lawsuit or claim and you need to step away from your everyday business to attend legal proceedings, or have to spend time and money collecting documents, blueprints, etc.?

When accidents occur, most construction managers are comforted in knowing they have adequate insurance to help mitigate their risk. Unfortunately, the cost of having to set aside time to attend disciplinary proceedings can be as costly as the claim itself. This is why it’s critical to understand the importance behind two policy enhancements offered by ProSight Specialty Insurance that you may not be aware of. They are Disciplinary Proceedings, Expense Reimbursement, and Subpoena Expense. Here’s what they are and how they work:

Disciplinary Proceedings Expense Reimbursement.  This endorsement helps mitigate your out of pocket expense (with the potential of cutting them out completely), to help cover expenses such as  lost wages and reasonable personal and travel expenses in the event that you or your employee is required to attend a disciplinary proceeding. These hearings can be several days long or several days spread across a long period of time.  ProSight offers up to $500 a day, with a maximum of $10,000 per policy period, for this coverage enhancement.

Subpoena Expense Reimbursement. This endorsement will help pay reasonable claim expenses incurred by you when having to respond to a subpoena.  Responding to a subpoena could require you to gather documents, obtain eye witness report, or at times retain an attorney.  This can happen during your policy period or extended reporting period, and is related to your business providing or failing to provide proper professional services. ProSight offers a $25,000 sublimit for these types of expenses.

Here are two example of how these endorsements work:

  • While working on a jobsite, you are notified of a lawsuit which required you to attend a disciplinary hearing in a neighboring state. As a result, you are subject to expenses related to the disciplinary proceedings, such as lost wages, hotel stay, gas, etc.
  • You’ve completed a project and weeks later receive a subpoena from a less than satisfied client regarding your professional services. You must now immediately, gather documents, prepare for your defense, and in some cases retain an attorney. The expenses incurred in regards to preparing and responding to the subpoena can be costly.

Many construction managers don’t factor in these types of expenses when it comes to purchasing insurance. This is why the construction experts at ProSight know it’s important to examine additional enhancements and endorsements for their policy holders, so that they can help protect your business’s reputation and integrity while maintaining a healthy bottom-line.

With a powerful combination of claims and underwriting experience in the construction industry, the experts at ProSight bring together one of the most comprehensive and broad insurance packages available, combining PL and CGL together with the endorsements most other insurers don’t offer.  To learn more about our insurance program that offers these critical reimbursements, please click here.