Insurance for Design-Build Projects - Design-Build for Water and Wastewater Projects - page 154

• Requiring the contractor to purchase an OCP policy in the name of the owner. (The
same alternatives are available to a general contractor that hires a subcontractor.)
Generally speaking, coverage is widely available to the owners and contractors under
the first scenario. The second scenario is another common approach, but contractual lia-
bility coverage is subject to all of the policy's terms, conditions, and exclusions, so it may
not provide complete protection for the hold harmless agreement. While the third is still
available, the widespread understanding of coverage on the owners' and contractors' poli-
cies, coupled with the readily available additional insured coverage, has rendered it nearly
extinct.
Railroad Protective Liability
When projects involve work on or near a railroad, the entities performing the work are
usually required by contract to provide liability insurance that protects the railroad in the
event of claims arising in connection with the work. Railroad protective liability policies
cover the railroad's legal liability to others for the work performed on its premises, as well
as damage to its own property, when that damage arises from the work. While the stan-
dard CGL form provides the similar OCP coverage, it specifically excludes the indem-
nification of a railroad for bodily injury or property damage arising out of construction
or demolition work within 50 ft (15.3 m) of any railroad. The underwriter may agree to
remove this CGL exclusion, thereby satisfying the contractual requirement for coverage.
Alternatively, an owner or contractor can purchase a separate railroad protective liability
policy and have dedicated limits for the railroad.
Automobile
Automobile liability insurance is mandatory in all fifty states, and each company is respon-
sible for maintaining insurance on the vehicles it owns, leases, or rents. A firm may choose
to include physical damage coverage for these vehicles. Sometimes they are contractually
required to do so by a lease or rental agreement.
Contractors are typically familiar with the automobile coverage that may apply in a
construction scenario, but most design firms will need to assess their exposure to pollu-
tion liability resulting from their use of autos, especially if they'll be transporting pollut-
ants or hazardous materials. The MCS-90 endorsement form (from the US Department
of Transportation Federal Motor Carrier Safety Administration) is mandatory for firms
engaged in this work. DB firms will also need to evaluate the mobile equipment (e.g.,
cherry picker) to be used on a project to determine whether the equipment is best covered
under the CGL policy or the auto liability policy. DB firms should also know the addi-
tional insured and waiver of subrogation coverages provided by their policies, along with
the contractual liability and fellow employee exclusions.
Workers' Compensation and Employers' Liability (WC/EL)
When employees are injured on the job, workers' compensation (WC) insurance pays for
the employee's medical care and lost wages. State law governs the application of worker's
compensation coverage and the benefits provided. In most states, workers' compensation