PROJECT DOCUMENTATION AND CONSTRUCTION DEFECT CLAIMS

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1 Workshop W2 Wednesday, November 20 9:00 10:15 a.m. and 10:45 a.m.-noon PROJECT DOCUMENTATION AND CONSTRUCTION DEFECT CLAIMS Presented by Michael Koppang Director Construction Claims Travelers Insurance Robert Kreuzer 2nd Vice President, Construction Risk Control Travelers Insurance Most contractors know that proper documentation of the work performed on a construction project is vital to defending construction defect claims, including allegations involving design, workmanship, and subcontractor management. And yet, improper documentation of processes is still a major problem when claims arise. This session will outline the key role project documentation plays in claim mitigation and the cost impact of being unprepared. Insights into the types of documentation that are needed to properly defend a claim, how state statutes vary governing document retention, and strategies for resolving claims through early, strategic intervention will also be offered. Further, proactive approaches to improving preconstruction and quality controls on a wide range of projects will also be examined. Workshop W2 To print on both sides of the page, set your printer for duplex printing. Copyright 2013 International Risk Management Institute, Inc. 1

2 Expert Advice. Smart Solutions. Knowledgeable Professional Responsive New Day Underwriting is a specialty resource for agents and brokers with a reputation for providing undivided attention and proven expertise for all of your construction related professional liability and environmental insurance needs. With attentive support from highly experienced underwriting professionals and our strong industry relationships, New Day delivers easy and time-saving, single-point access to the nation s major insurance carriers. We ll show you how we can design the optimal program to meet your client s specific needs. New Day Underwriting Managers LLC info@newdayunderwriting.com newdayunderwriting.com Tel: Knowledgeable Professional Responsive

3 Michael Koppang Director Construction Claims Travelers Insurance Mr. Koppang is currently responsible for a group of 10 construction engineers, architects, and forensic specialists located throughout the country. He and his team assist construction claim professionals and defense attorneys with complex aspects of construction defect claims through on-site investigations, products failure analyses, and design validation. Results from these efforts are aggregated and leveraged in loss prevention efforts through customer interactions. Prior to joining Travelers, Mr. Koppang spent 8 years working for a high-profile construction management firm coordinating construction activities of high-rise buildings, laboratories, hospitals, and schools. Mr. Koppang s 8 years of experience as a Superintendent with the construction management firm included reinforced concrete construction, elevators, roof installations, vivarium construction, mechanical systems, life safety testing, and code compliance. Prior to working in construction management, Mr. Koppang worked in a design service center for a national engineering consulting firm where duties included design and oversight of landfill and roadway projects where building bearing capacity and settlement analysis were contemplated. Mr. Koppang graduated from The University of Massachusetts Lowell with a bachelor of science degree in civil engineering. Robert J. Kreuzer 2nd Vice President, Construction Risk Control Travelers Insurance Mr. Kreuzer is responsible for countrywide construction risk control services delivered by a team of more than 100 construction risk control consultants. He has held numerous leadership positions with Travelers, including 7 years as a Regional Risk Control Director and 5 years leading a group of construction defect engineers. During his tenure at Travelers, Mr. Kreuzer has participated on many construction defect litigation teams to facilitate technical clarification to property, liability, and subrogation claim professionals and attorneys. Key accomplishments include leading efforts to create and integrate a team of construction defect forensic engineers as technical resources into the construction claim and legal operations. Workshop W2 Prior to joining Travelers, Mr. Kreuzer spent 7 years working within the construction industry overseeing various corporate and project risk management programs, including claims management and safety operations. Notable projects include Reagan National Airport ($250 million), Boston University School of Management ($72 million), Norwalk Wastewater Treatment Facility ($30 million), Greenwich Hospital ($80 million), and the Quantico Marine Manpower Center ($35 million). Mr. Kreuzer graduated from Central Connecticut State University with a bachelor of science degree in occupational safety. 3

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5 Project Documentation and Construction Defect Claims Presented by: Mike Koppang, Director of Claim Services, Construction Defect, Travelers Insurance Bob Kreuzer, 2VP, Construction Risk Control, Travelers Insurance Travelers Disclaimer This program or presentation is only a tool to assist you in managing your responsibility to maintain safe premises, practices, operations and equipment, and is not for the benefit of any other party. The program or presentation does not cover all possible hazardous conditions or unsafe acts that may exist, and does not constitute legal advice. For decisions regarding use of the practices suggested by this program or presentation, follow the advice of your own legal counsel. Travelers disclaims all forms of warranties whatsoever, without limitation. Implementation of any practices suggested by this program or presentation is at your sole discretion, and Travelers or its affiliates shall not be liable to any party for any damages whatsoever arising out of, or in connection with, the information provided or its use. This material does not amend, or otherwise affect, the provisions or coverage of any insurance policy or bond issued by Travelers, nor is it a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. 2 Workshop W2 5

6 Objectives 1. Share Expertise/Challenges Understanding Construction Defect (CD) Claims Influencing Factors 2. Prevention and Recognition Documentation Technology Advancement Material Changes Proactive vs Reactive 3. Where Do We Go From Here 3 Share Expertise/Challenges Failure of any building component or system is potentially the result of: Design Specs Products Installation Operation/Maintenance CD DEFINITION Damage occurs over time (no known date of loss) 4 6

7 Share Expertise/Challenges Materials Selection Manufacturing Defects Compatibility 5 Workshop W2 7

8 Objectives 1. Share Expertise/Challenges Understanding Construction Defect (CD) Claims Influencing Factors 2. Prevention and Recognition Documentation Technology Advancement Material Changes Proactive vs Reactive 3. Where Do We Go From Here 8 8

9 Prevention and Recognition Considerations Building Codes Roof Warranties Water Intrusion Manufacturer Guidance Structural Considerations 9 Prevention and Recognition Southern Pine Design Values Decreased To review the revised tables of design values and revised span tables published by the American Wood Council, please visit Workshop W2 10 9

10 Prevention and Recognition Pro-Active vs Reactive Self-Assessment Leveraging available resources 11 Objectives 1. Share Expertise/Challenges Understanding Construction Defect (CD) Claims Influencing Factors 2. Prevention and Recognition Documentation Technology Advancement Material Changes Proactive vs Reactive 3. Where Do We Go From Here 12 10

11 Industry Perspective Claim Preserve evidence Engage the right experts early in the game Before you start a project: o Product/Materials Knowledge o Value Engineering o Mockups o Project Specific Challenges o Sub-contractor Pre-qualifications Process Behavior Legal Careful and thorough documentation of changes, inspections, approvals (consider electronic databases) Get claims and council involved as soon as possible Contractual Language Keeping up with standards: o State statutes o Building Codes o Industry Advisories Be very wary of changes on the fly Photo documentation during construction 13 Industry Perspective Take-Aways Preserve evidence Engage the right experts early in the game Before you start a project: o Product/Materials Knowledge o Value Engineering o Mockups o Project Specific Challenges o Sub-contractor Pre-qualifications Workshop W2 Careful and thorough documentation of changes, inspections, approvals (consider electronic databases) Get claims and council involved as soon as possible Contractual Language Keeping up with standards: o State statutes o Building Codes o Industry Advisories Be very wary of changes on the fly Photo documentation during construction Leveraging available resources Review/upgrade project documentation process 14 11

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