CIAK, general insurance question

Chuck,

I'd like your take on a situation:

As I stated in an earlier thread, we had a severe vandalism occur on a roof we were doing. We know who, at least from a collective POV, but have no proof.

At the end of our work day, we loaded ladders, tools, etc. into the truck and came home. The roof was accessed by means unknown to us, but it was not by our equipment. All of the various roof areas were all damaged. Some roofs were complete, some not.

The owner thinks we need to pay for the damages, and wants a new roof installed.

We immediately called our insurance agent and he stated that he did not think our carrier would be liable, that it was a case of random vandalism and not a case of negligence on our part, and that the owner's insurance should be contacted.

Not completely satisfied, I contacted my adjuster for Cincinatti Insurance, and she reiterated the same, adding that unless our contract put such liability in our lap, she didn't see that we were responsible. She said "This is sort of like saying if vandals broke into the church and painted graffiti on the walls, that we needed to pay for it because we were working there."

That made perfect sense to me. If we had left a key in the door, and that's how they gained access then we would be responsible. If we had left our ladders at the site and that's how they got on the roof, then we would be responsible. But that's not what happened.

In Ohio, once we have affixed product to the structure, we cannot take it back for lack of payment. We must go through the courts for satisfaction. All of the materials that were damaged were completed roof products.

Our contract reads in paragraph 10 "Contractor accepts no liability to indemnify or hold Owner harmless for damages to persons or property, except those that are direct result of Contractor’s negligent error or omission which occur during performance of Contractor’s work."

In your professional opinion, as an adjuster for neither interested party, who's responsibility is it to pay for the damages incurred?>>>

Mike. The hold harmless clause sums it up. I have had no personal experience with something like this . I have been in meetings where this subject has come up and the hold harmless clause has been the pivot point. A call to a known and trusted lawyer , yes they do exist would be my next council if it becomes a sticking point . Lien the property if you haven't already make sure the suppliers do the same. For anyone who doesn't have a hold harmless clause in their contracts ......do it. I will continue to check it out with the inside legal people I know and trust if you want. I can only give you my personal opinions on this . If it turns legal I might have to tune out with the Internet, If you want I can be reached by phone . A lot more private if you know what I mean. I'm sorry if I'm not totally responsive I'm on my own case also. It is not that I don't care I do. If you can be patience I'll will do my best to help.>>>

that really stinks Mike. I can't see how you or your crew could possibly be at fault. I feel the pain of the owner of the roof But come on it was done by vandals it's there insurance that has to pay. Maybe working closely with there insurance adjuster to get the most for them would be helpful?>>>

The legal side is one thing, but the really upsetting part is that the owner probably considers himself the innocent victim of a dispute between you and the vandals which could have some unpleasant non-legal ramifications if not handled well. Aside from suddenly needing a night watchman and/or a private detective, I wonder what else might be needed to keep the lid on if general business prospects don't improve for the vindictive competitors.>>>

You have a real point there. The legal side is by the look of it and from the story told not a problem. Where as with the other side from the people causing the problems ? Poignant egg.>>>

That really sucks, Mike. Here in Washington, the legislature has swung so far towards consumer protection that most insurance carriers have abandoned the state. Here, when you finally find insurance, you don't dare make any claims out of fear of not being renewed. Ironically, the only time you would ever use it would be if lawyers get involved.>>>

I thought about this a little more. Not that it changes anything . There are many interpretations of policies and what they mean. I think that mat be another reason it appears that things are not on the up and up when a difficulty arises. That being said I haven't looked on the back of one of my contracts in awhile here I believe is what my take of it is. IN NO EVENT, WHETHER OCCASIONED BY A BREACH OF WARRANTY CONTAINED IN THIS AGREEMENT, OR BY ANY OTHER CAUSE WHETHER BASED UPON OR SOUNDING IN CONTRACTR TORT NEGLIGENCE STRICT LIABILITY WILLFUL AND WANTON CONDUCT WARRANTY ( EXPRESSED OR IMPLIED)OR OTHERWISE ARISING OUT OF OR RELATING TO THE WORK AND SERVICES PERFORMED UNDER THIS AGREEMENT OR OTHERWISE SHALL CONTRACTOR BE LIABLE FOR OR OBLIGATED IN ANY MANNER FOR SPECIAL CONSEQUENTIOA OR INDIRECT DAMAGEDS INCLUDING BY WAY OF ECAMPLE BUT NOT BY WAY OF LIMITATION SUCH DAMAGES AS LOSS OF USE LOSS OF PROFITS OR SUITS BY THIRD PARTIES>>>

CIAK,

I was with you, following along quite nicely, until that last CAPS PARAGRAPH.

I need an interpreter.

Thanks for the efforts so far. I'll let you know how it goes in the morning and if we need any more information.

As always, I will quite pleasant. I honestly don't think the owner has made contact with their insurance company, while claiming that they said "It's the contractor's responsibility". I would think that a carrier worth their salt would have made some form of contact with us.>>>

Your right Mike. Don't understand it either. Legalize. Lawyers understand I'm not a lawyer . However I was asked once back in the day to remove it if I wanted the job. The explanation I got was from the corporate lawyer that it held me harmless .>>>

I think it probably reads something like this:

[size=2] IN NO EVENT SHALL CONTRACTOR BE LIABLE FOR... OR OBLIGATED IN ANY MANNER FOR... SPECIAL, CONSEQUENTIAL, OR INDIRECT DAMAGES... INCLUDING (BY WAY OF EXAMPLE BUT NOT BY WAY OF LIMITATION) SUCH DAMAGES AS LOSS OF USE, LOSS OF PROFITS, OR SUITS BY THIRD PARTIES

WHETHER OCCASIONED BY A BREACH OF WARRANTY CONTAINED IN THIS AGREEMENT

OR BY ANY OTHER CAUSE

(???) WHETHER BASED UPON OR SOUNDING IN CONTRACT TORT NEGLIGENCE STRICT LIABILITY (???)

WILLFUL AND WANTON CONDUCT

WARRANTY ( EXPRESS OR IMPLIED)

OR OTHERWISE ARISING OUT OF OR RELATING TO THE WORK AND SERVICES PERFORMED UNDER THIS AGREEMENT (or other agreements) [/size]>>>

Mike,

In my opinion, and that is all it is, I feel that both parties need to submit the matter to their insurance providers and let them duke it out via subrogation.

You may not have the desire to turn in a claim that you feel you have no liability for, but if you do not file a "Timely Claim", there is probably language in your own policy that would exclude your company from any potential liability coverage.

In the long run, let them and their legal department fight your fight for you, as they are responsible to supplying you with competent Counsel on your behalf and in your best interests.

Although that legal representation is paid for by your insurance company, it is their legal responsibility to place your company's best interests above any other party, including the insurance provider you have.

Ed

>>>

Good take on it. Especially since the consequences of 'bad faith' are a real risk to the carrier who refuses to help.

Additionally, I have been told by reliable sources that there is a whole subset of the legal profession that deals exclusively with the interpretation of coverage issues and it is a very contentious one, even among the specialists. Unless the claim is very large, the interested parties would probably prefer to avoid that expense, along with discovery and forensics.

If it were somebody else, Cincinatti might tell the contractor to take a hike, but a would bet money that they will assist Mike in negotiating this. Who knows though. These things can get wierd.>>>

Good replies Ed egg, I'm not a lawyer by a long shot. I can help most times for property claims and keeping things moving . That was a little outside my expertise.>>>

You've got a problem that no "contract language" will get you out of, believe me. You've got a customer who "thinks" you're at fault here and that's all it takes. Get ready to either do another roof (at your expense) or hand it over to the lawyers. What you have to decide is the cost (which is cheaper in the long run). Sorry to hear of another slimey insurance carrier passing the buck. They sure don't do that when it comes to premium time ;) ;)

JET>>>

....good case in point relating to any "additinally insured" demands a client may make>>>

Good point Mac , I wait in anticipation for Mike return. I suspect he will come back with a stall from the other side a delay. Thanks Mike for posting this . It gets a dialogue going if we can keep it on track. Ed man you got some smarts . egg nice reply, jet if we can get you off the slander it would be great I know you have some good ideas and smart. It is just your " bedside manner " that is full of splinters.>>>