The Increasing Trend of Caps in Construction Contracts and Negotiating Them
November 27, 2023 —
Jarred Trauth - ConsensusDocsRisks are inherent in every construction project and all parties involved face them: owners, designers, general contractors/builders, subcontractors, suppliers…. Equitably allocating such risks is one of the most important and most negotiated areas of any construction related contract. Limitations of liability provisions are key to risk allocation. These provisions include no damage for delay provisions and caps on delay damages, warranty limitations and exclusions, indemnity limitations, and consequential damage waivers. Another, and the focus of this article, is a liability cap fixing the total amount of damages for which a party may be liable under the contract (the “Liability Cap”). Liability Caps have become more and more common in construction and construction related contracts, including major component supply agreements and design agreements.
This article will discuss Liability Caps generally and considerations of an owner or contractor negotiating them, including carve-outs (i.e. exceptions) to them.
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Jarred Trauth, Jones Walker LLPMr. Trauth may be contacted at
jtrauth@joneswalker.com
Hunton Insurance Coverage Partner Lawrence J. Bracken II Awarded Emory Public Interest Committee’s 2024 Lifetime Commitment to Public Service Award
February 26, 2024 —
Hunton Insurance Recovery BlogOn February 7, the Emory Public Interest Committee (EPIC) honored insurance coverage partner Lawrence (Larry) J. Bracken II with their 2024 Lifetime Commitment to Public Service Award at the annual
EPIC Inspiration Awards. As one of the Emory University School of Law’s signature events, the Inspiration Awards celebrate members of the community who do extraordinary work in the public interest and provide funding for public interest summer jobs.
Larry has more than 37 years of experience litigating insurance coverage, class action and commercial cases in federal and state courts throughout the United States. He represents policyholders in insurance coverage litigation and arbitration, and is a Fellow of the American College of Coverage Lawyers. Larry also has litigated class actions and other complex commercial disputes for more than three decades. Pro bono representation of clients in habeas corpus, prisoner rights, and landlord-tenant litigation is an important part of his practice. Larry currently serves as the President of the Board of Directors of the Atlanta Volunteer Lawyers Foundation.
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Hunton Andrews Kurth LLP
Meet the Forum's In-House Counsel: RACHEL CLANCY
November 16, 2023 —
Jessica Knox - The Dispute ResolverCompany: Lobar, Inc.
Email: rachel.clancy@lobar.com
Website: www.lobar.com
College: York College of Pennsylvania (Bachelor of Science in Marketing, 2001)
Graduate School: Florida Institute of Technology (MBA in Acquisition and Contract Management, 2004)
Law School: Penn State University, Dickinson School of Law (JD 2007)
States Where Company Operates/Does Business: Headquarters are in Dillsburg, PA; construction projects located in Pennsylvania, Maryland, New York, and West Virginia
Q: Describe your background and the path you took to becoming in-house counsel.
A: Before law school, I spent three years as a Contract Specialist writing construction contracts for the Department of Defense, Naval Facilities Command in New Jersey. I had no idea I'd eventually find my way back to construction. After law school, I spent five years in the business department of a local law firm handling corporate formations, a variety of commercial contracts, and learning some real estate law. After another four years in-house with a data and marketing company in Harrisburg, I accepted my current position with Lobar, where I've been for the last seven years.
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Jessica Knox, Stinson LLPMs. Knox may be contacted at
jessica.knox@stinson.com
Partner Jason Taylor and Senior Associate Danielle Kegley Successful in Appeal of Summary Disposition on Priority of Coverage Dispute in the Michigan Court of Appeals
December 11, 2023 —
Jason Taylor & Danielle K. Kegley - Traub LiebermanIn this appeal brought before the Michigan Court of Appeals, the appellate court ruled in favor of Traub Lieberman’s insurance carrier client (the “Carrier” or “Client”), affirming an award of summary disposition in favor of the Carrier in a coverage lawsuit. The coverage lawsuit involved a priority dispute between the Carrier and another insurer over which company’s policy had responsibility to cover the defense of their mutual insured, a heating and cooling contractor (the “Insured”) in an underlying lawsuit alleging carbon monoxide poisoning. The Carrier issued a contractor’s pollution liability policy and the other insurer issued a commercial general liability policy to the Insurer. Both the Carrier and the other insurer filed cross-motions for summary disposition in the trial court on the priority of coverage issue. The trial court granted the Client’s motion, holding that the CGL carrier was the primary insurer based on the language in the policies’ “other insurance” clauses. The trial court rejected the CGL carrier’s argument to apply the “total policy insuring intent” or “closest to the risk” tests—tests which Michigan courts have not adopted. Specifically, the court rejected the CGL carrier’s argument that the Client’s contractor’s pollution liability policy was more specifically tailored to the loss in the underlying lawsuit. The trial court also rejected CGL carrier’s alternative argument that the “other insurance” clauses in the policies were irreconcilable, requiring a pro rata allocation based on the respective limits of the policies.
Reprinted courtesy of
Jason Taylor, Traub Lieberman and
Danielle K. Kegley, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com
Ms. Kegley may be contacted at dkegley@tlsslaw.com
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Reasonable Expectations – Pennsylvania’s Case by Case Approach to the Sutton Rule
February 12, 2024 —
Melissa Kenney - The Subrogation StrategistIn Mutual Benefit Ins. Co. a/s/o Michael Sacks v. Koser, No. 1340 MDA 2023, 2023 Pa. Super. LEXIS 574, 2023 PA Super 252 (Mutual Benefit), the Superior Court of Pennsylvania discussed whether a landlord’s property insurer could file a subrogation action against tenants that had negligently damaged the landlord’s property. Despite there being more than one clause in the lease holding the tenants liable for the damages, the court held that because there was a provision requiring the landlord, not the tenants, to insure the leased building, the insurer could not subrogate against the tenants.
In Pennsylvania, a tenant’s liability for damage to a leased premises in a subrogation action brought by a landlord’s insurer is determined by the reasonable expectation of the parties to the lease agreement. Under this approach, to determine if subrogation is permitted, the court considers the circumstances of the case and examines the terms of the lease agreement.
In Mutual Benefit, the tenants leased and resided in a residential home pursuant to a lease agreement. The lease specifically addressed insurance, stating that landlord was responsible for obtaining insurance on the dwelling and the landlord’s personal property, and tenants were encouraged to procure separate insurance for their personal property. The lease also addressed liability for damage to the leased property, stating generally that the tenants were responsible for damage caused by the tenants’ negligence.
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Melissa Kenney, White and WilliamsMs. Kenney may be contacted at
kenneyme@whiteandwilliams.com
The Top 3 Trends That Will Impact the Construction Industry in 2024
December 04, 2023 —
The Hartford Staff - The Hartford InsightsAs more than 40% of the current U.S. construction workforce will retire in the next decade, industry leaders need to equip themselves with the necessary resources to combat the shifting work environment.1
“Trends in the construction industry will fluctuate in the coming years, which can lead to additional risks for industry leaders. It will be important to think about how they can address any potential risk factors. A lot of leaders have been increasing their planning efforts and looking into technology solutions to combat the ongoing labor shortage,” said David DeSilva, head of construction at The Hartford. Here, he outlines the top three top trends for business leaders to watch in 2024.
1. Ongoing Labor Shortages
Construction is an industry that traditionally has a high labor turnover rate, which means companies needs to hire more frequently. This only increases during labor shortages. The construction workforce is up against several factors, including an aging workforce and recruitment struggles.
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The Hartford Staff, The Hartford Insights
Mass Timber Reduces Construction’s Carbon Footprint, But Introduces New Risk Scenarios
March 04, 2024 —
Michael Bruch & Franck Fumat - Allianz CommercialMass timber has the potential to be a critical building component for the cities of the near future given the need for the construction sector to reduce its reliance on concrete and steel to lower its Co2 emissions. However, as this market grows and mass timber buildings evolve to greater heights, the construction risk landscape will also be transformed, bringing risk management challenges for companies, according to the new Emerging Risk Trend Talk
report from Allianz Commercial.
“The emergence of mass timber as a sustainable construction alternative represents a significant opportunity for the building sector to reduce its carbon footprint while also satisfying a demand for a material that is more cost-efficient but as durable as steel and concrete,” says Michael Bruch, Global Head of Risk Advisory Services at Allianz Commercial. “However, in any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, as well as bringing benefits, and mass timber is no different. Given this market’s expected future growth, companies should do all they can to develop a greater understanding of their exposures including fire, water damage, repetitive loss scenarios and even termite infestation, and ensure they have robust loss prevention measures in place to combat these.”
The need for mass timber
The building and construction sector is among the largest contributors to Co2 emissions, accounting for over 34% of energy demand and around 37% of energy and process related Co2 emissions in
2021 [1]. Given emissions reduction is essential to meet climate change commitments around the world, the need for more sustainable solutions in the built environment has become increasingly important, driven by growing investor and consumer concerns, and legislation, regulation and reporting requirements evolving quickly in many jurisdictions around the world.
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Allianz Commercial
White and Williams Selected in the 2024 Best Law Firms ranked by Best Lawyers®
December 04, 2023 —
White and Williams LLPWhite and Williams LLP is proud to be selected in the 2024 Best Law Firms ranked by Best Lawyers®.
The firm was recognized in the National Rankings in four practice areas including both Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law and Insurance Law (Tier 1). In addition, the firm’s office locations in Philadelphia, New York City, Boston, Baltimore, Delaware and New Jersey were recognized for 30 practice areas in the Metropolitan rankings.
Achieving a tiered ranking in Best Law Firms signals a unique combination of quality law practice and breadth of legal expertise. The Best Law Firms research methodology includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field and review of additional information provided by law firms as part of the formal submission process.
The 2024 Best Law Firms rankings can be accessed at www.bestlawfirms.com.
2024 Best Law Firms
National Tier 1
- Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
- Insurance Law
National Tier 3
- Construction Law
- Litigation – Construction
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White and Williams LLP