Note to “Additional Insureds” Relying on Builders’ Risk Insurance: Federal Court Decision Evaluates Extent of Coverage

The United States District Court for the District of Massachusetts has provided construction project owners, developers, general contractors, sub-contractors, suppliers, and vendors with a helpful reminder about obtaining effective additional insurance coverage on construction projects.

In Factory Mut. Ins. Co. v. Skanska United States Bldg., No. 18-cv-11700-DLC, 2020. U.S. Dist. LEXIS 95403, the District Court held that a construction project’s general contractor and sub-contractor were not additional insureds under the construction project’s owner’s Builders Risk insurance policy (“the Policy”). The construction project’s general contractor and its sub-contractor contended they were additional insureds as a defense based on Massachusetts’ anti-subrogation doctrine, which prevents insurers from subrogating against their own insureds for the type of risk the insurer provided to such insureds. The two contractors moved for summary judgment in the subrogation recovery action brought against them claiming they were both additional insureds under the Policy. The District Court, in dismissing the project’s general contractor’s and its sub-contractor’s motions for summary judgment based on their anti-subrogation defenses, determined that the project’s general contractor and its sub-contractor did not qualify as additional insureds under the Policy because: (1) additional insureds under the Policy are those whose liability would be purely vicarious “to the extent of the insured’s legal liability for insured physical loss or damage,” which the District Court determined was not applicable to the undisputed facts pled in the subrogation recovery action and (2) the language of the policy itself seemed to indicate that it applied to only one (and not multiple) insureds, which, in the District Court’s opinion, applied only the construction project’s owner. As a result, the subrogation lawsuit against both the project’s general contractor and its sub-contractor may proceed as the anti-subrogation rule did not apply. Continue Reading

AIHA Releases COVID-19 Guidelines for Construction Industry

This post was authored by Jonathan Schaefer, who is a member of Robinson+Cole’s Environmental, Energy + Telecommunications Group. Jon focuses his practice on environmental compliance counseling, occupational health and safety, permitting, site remediation, and litigation related to federal and state regulatory programs.

Since the COVID-19 pandemic began affecting jobsites in the U.S., the Occupational Safety and Health Administration (OSHA) has released, and revised, COVID-19-related workplace guidance several times (see, Additional OSHA Guidance on COVID-19). To date, OSHA has not put in place COVID-19 specific regulations. Instead, OSHA has warned employers that they may be subject to citations under potentially applicable existing regulations or for violation of the General Duty Clause (see, OSHA’s COVID-19 Standards webpage). OSHA’s General Duty Clause requires employers to provide their employees with a workplace (or jobsite) free from recognized hazards likely to cause death or serious physical harm.

OSHA’s position so far has demonstrated that it may view exposure to COVID-19 at a jobsite as a General Duty Clause violation. As the potential for receipt of OSHA General Duty Clause citations related to COVID-19 remains, employers across the country, and especially in the construction industry, continue to wait for clearer COVID-19-related guidance (and possibly regulations) from OSHA.

However, further action from OSHA may not be coming anytime soon. In the meantime, at least one state (more accurately, commonwealth) has taken concrete action to put in place COVID-19-related OSHA standards (see, Virginia Issues First COVID-19 OSHA Standard). Local governments have also stepped in with their own regulations and guidelines (see, OSHA’s COVID-19 Guidelines for the Construction Industry are Generally Consistent with New York State’s and New York City’s Existing Guidelines).

Enter the American Industrial Hygiene Association (AIHA). The AIHA recently released “Focus on Construction Health: COVID-19” a guidance document intended to help the construction industry manage COVID-19 on jobsites. The guidance document breaks down key background information about COVID-19, its health effects, and how it can be spread.

The AIHA’s guidance also provides construction employers key information on the types of factors that affect workplace exposures. It further lays out, in an easily consumable and usable format, a seven-step plan for protecting workers on construction jobsites. The plan walks through a Job Safety Analysis (JSA) to tailor precautions and controls to jobsite-specific tasks and changing conditions.

While the AIHA’s guidance is that of a nongovernmental organization and does not have the force of law, it could be a useful tool for addressing COVID-19 risks. Each jobsite is unique and will require different approaches to best address the continuing threat COVID-19 poses to workers and the ability for projects to continue on schedule. Concise and convenient guidance documents like AIHA’s can be valuable tools for construction employers as we continue to wade into unchartered territory for jobsite health and safety.

Governor Lamont Issues Executive Order Allowing Pandemic Workers Easier Access to Workers’ Compensation Benefits

On July 24th, Connecticut Governor Ned Lamont signed Executive Order No. 7JJJ, which creates a rebuttable presumption that all employees who worked on site and tested positive for COVID-19 during the first three months of the pandemic contracted the disease while on the job, giving employees a presumptive claim to workers’ compensation coverage. Connecticut follows suit with states such as Arkansas and California in taking executive order action to make it easier for pandemic workers to access workers’ compensation benefits. Continue Reading

Robinson+Cole Hosts Fourth Construction Industry Roundtable

Robinson+Cole’s Construction Group hosted its fourth— but first ever virtual — Construction Industry Roundtable on July 14, 2020. Representatives of major design and construction industry organizations and stakeholders in the Northeast were in attendance to discuss the state of the regional market and to look ahead for trends to watch for 2021. Continue Reading

Robinson+Cole Among The Top 50 Construction Law Firms™

Robinson+Cole’s Construction Group has been ranked #35 in the second annual The Top 50 Construction Law Firms list published by Construction Executive magazine on June 19, 2020.

“We are honored to receive this ranking and be listed among the top 50 firms in the country,” said Robinson+Cole Construction Group Chair Gregory R. Faulkner. “Being ranked by a respected industry publication that is widely-read by construction business owners is a validation of the commitment and approach that our whole team takes to support our clients and the industry, and we look forward to continuing that effort on their important projects.” Read more.

OSHA’s COVID-19 Guidelines for the Construction Industry are Generally Consistent with New York State’s and New York City’s Existing Guidelines

This post was co-authored with Jonathan Schaefer, who is a member of Robinson+Cole’s Environmental, Energy + Telecommunications Group. Jon focuses his practice on environmental compliance counseling, occupational health and safety, permitting, site remediation, and litigation related to federal and state regulatory programs.

On May 26, 2020, the Occupational Safety and Health Administration (OSHA) launched a webpage with coronavirus-related guidance for construction employers and workers. The guidance includes recommended actions to reduce the risk of exposure to the coronavirus. While this guidance is not a standard or regulation and creates no new legal obligations, following OSHA guidance could help in defending a General Duty Clause citation.

Under OSHA, all employers have the obligation, pursuant to the General Duty Clause, to “furnish to each of its employees a workplace that is free from recognized hazards that are causing or likely to cause death or serious physical harm.” Consistent with trends seen prior to the COVID-19 pandemic, most OSHA investigations and citations for COVID-19 related issues are arising from employee complaints. Should OSHA issue a citation to an employer, the penalties per violation can range from $9,472 to $134,937. Continue Reading

New York Empire State Development Issues Guidance for Construction Staging Activities

In anticipation of reopening all construction activities statewide, on May 22, 2020, Governor Cuomo announced that construction staging activities would be allowed to commence before the Regions officially reopen. On May 31, 2020, the New York Empire State Development (“ESD”) updated its Guidance on Executive Order 202.6 (“NY Guidelines”) to provide specifications regarding construction staging. With most Regions currently in Phase One or Phase Two, the staging guidance is most applicable to New York City which is currently restricted to conducting only essential construction until it is cleared for a Phase One reopening. The allowed activities include the following: Continue Reading

Massachusetts Construction Litigation Scheduled to Get Back on Track

With the issuance of a revised order by the Massachusetts Supreme Judicial Court (SJC) dated May 26, 2020, construction litigation in Massachusetts is poised to re-start in earnest after July 1, 2020. As the SJC stated in its Order, “unless there is a new surge in COVID-19 cases in the Commonwealth,” the de facto pause in litigation that went into effect in mid-March 2020 with the tolling of all civil statutes of limitations and all deadlines set forth in statutes or court rules, standing orders, tracking orders, or guidelines, “shall end and not be further extended.”

As some Massachusetts construction litigators have experienced, the SJC’s prior orders, which extended the time to respond to or enforce crucial litigation mechanisms indefinitely, had the effect of stemming litigation activities on the whole by discouraging the filing of new matters, service of written discovery requests, and the conducting of motion practice. Now that the SJC has signaled to the litigation bar that the guardrails enacted in the wake of COVID-19 will come off as of July 1, 2020, members of the construction industry should expect to be served with third-party subpoenas for documents, direct payment claims, and mechanic’s liens. Current litigants should also be prepared to attend remote depositions, which the SJC also blessed to begin immediately without the affirmative consent of the party being deposed, as had been required in the past.

A link to the press release from the SJC highlighting these changes can be found here.

Balancing New Technology and Privacy When Using Drones in Land Use and Construction

The mixture of sheltering-in-place, warm weather, and increasing drone usage creates a combustible situation – literally. Drone shootings are on the rise as property owners seek to combat perceived trespass, nuisance and invasions of privacy.

These were some of the legal issues discussed during a webinar presented by the American Bar Association’s Section on Real Property Trusts and Estates (ABA RPTE) at its 32nd Annual Conference (held virtually for the first time) on May 15, 2020. The webinar focused on the legal landscape and issues to consider in counseling real estate and construction businesses on the commercial use of small unmanned aerial systems (sUAS). The panel included attorneys as well as an engineer, who presented drone video footage and computer graphics used to collect data more efficiently during land use evaluation, mid-construction and post-construction. Continue Reading

New York’s Multi-Faceted Approach to Reopening “Non-Essential” Construction

COVID-19’s impact in New York has been particularly region-specific. To address the disparity, Governor Cuomo created a four-phase reopening plan to be implemented where geographic regions meet their required “health metrics.”

Each phase correlates with a group of industries in which their non-essential businesses may permit the return of their in-person workforce – under certain conditions – in qualifying regions. (As of the date of this publication, the regions that have qualified based on their health metrics are the Capital Region, Central New York, Finger Lakes, Mohawk Valley, North Country, Southern Tier and Western New York.) Construction is one of the industries comprising “Phase One.”

Construction companies within an eligible region may reopen so long as they satisfy the specific construction industry health and safety guidelines in four categories: physical distancing, protective equipment, cleaning and hygiene, and communication. The guidelines outline the mandatory requirements and provide additional recommended “best practices,” as follows: Continue Reading

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