Public Liability Insurance

Public liability insurance covers the liability for payment of damages for injuries sustained by, or the death of, anyone other than employees of the contractor, when such injuries or death arise out of accidents caused by reason of the work being done.

There are no statutes providing the amount to be paid a person injured or the heirs of one killed. The damages recoverable depend upon the circumstances surrounding the accident, the earning capacity of the one injured or killed, and various other considerations which may influence a jury.

There is no provision of law requiring a contractor to insure himself against damages for which he is liable under the common law.

POLICY LIMITS. The comments under employer's liability apply to public liability insurance.

It is customary to increase these limits of $5,000/$10,000 to such amounts as may be necessary fully to insure the hazard of injuring persons, taking into consideration the class of people who may be injured or killed, the number who might be the victims of one accident, and the character of work being done. Blasting operations are more hazardous than brick-laying. This increase in limit is secured by purchasing excess insurance for additional amounts. Sometimes limits are established up to $50,000 for one person and a total of $250,000 for one accident.

In outlying districts, where few people pass the operation, the risk of injuring outsiders is reduced and high limits of insurance may not be necessary to cover possible liability to those not employed on the job. The work, however, may be of a character involving risking the lives of many men employed by subcontractors. If, however, the work is being

done in a busy financial or shopping district, where a single accident might injure many people, the limits of insurance carried should be greatly increased.

The tendency of, juries in awarding damages must be considered in deciding limits to be carried. If the tendency locally is to bring in verdicts for large amounts, the insurance carried should be increased accordingly.

Court costs and expenses of defending suits are assumed by the insurance company, irrespective of policy limits for liability to persons injured.

WHAT "PUBLIC" MEANS.

An exceedingly important

point that must not be overlooked is that the employees of subcontractors are "public" risks to the general contractor. The "public" does not mean only those passing an operation and not engaged on it. Every person injured through an accident and not directly in the contractor's employ is one of the public.

PREMIUMS CHARGED. The insurance company charges a premium for carrying public risks which is based on each $100 of wages earned by the workmen, the rates per $100 varying according to their trades. To illustrate: the possibility of injury to the passing public from any employee doing interior finishing work in a building is relatively small when compared with the chances of injury from a mechanic doing outside structural work.

Public liability policies contain generally the same classifications of payrolls as those for workmen's compensation and employer's liability insurance. The premiums are determined by taking the payroll distribution and multiplying the payroll for each classification by the rate named in the policies. Policies should contain provision about covering all work for reasons given above.

Contractor's Contingent Insurance

Under policies for this kind of insurance, the companies agree to indemnify the contractor against loss from the iiability imposed by law upon him for damages on account of bodily injuries or death suffered as the result of an accident by any person or persons not excepted in the policy, while upon the work or within designated premises, or upon the sidewalk or other ways immediately surrounding the same, during the prosecution of the work; and to defend in the name and on his behalf any suit brought against the assured to enforce a claim, whether groundless or not, for damages on account of bodily injuries or death suffered, or alleged to have been suffered, by any person or persons, not excepted in policy, at the places designated during the prosecution of the work and as the result of an accident.

POLICY LIMITS. The comments under "Employer's Liability" and "Public Liability Insurance" apply to this form of insurance.

PREMIUMS CHARGED. The premiums are charged at a rate per $100 of the cost of all labor and material, except the labor appearing on the contractor's own workmen's payrolls and the materials installed by these workmen, or substantially, on the cost of work sublet.

When writing owner's contingent policies, the insurance companies agree to indemnify the owner against loss from the liability imposed by law upon him for damages, on account of bodily injuries (including death at any time resulting therefrom) accidentally suffered, or alleged to have been suffered, by reason of the performance of the work let by him to independent contractors, or through the existence of materials intended for such work placed upon the premises,

or lawfully maintained upon the ways adjacent thereto, by any person or persons, including watchmen employed to care for such premises and materials.

POLICY LIMITS. The comments under "Employer's Liability" and "Public Liability Insurance" apply to this form of insurance.

PREMIUMS CHARGED. The premiums charged are at a stated rate for each $100 of cost of the building or operation.

Vehicle Insurance

Public liability policies exclude liability for accidents resulting from operation of vehicles and therefore this liability must be covered by separate policies if it is to be insured against.

Teams insurance covers the risk of using teams on an operation, whether owned or rented by the contractor. The necessity for having teams insurance depends upon the extent of the control exercised by the contractor over the drivers. Whether the control is of such a nature as to require insurance is a matter to be carefully considered whenever teams are used. Accident cases are continually taken to court to determine who legally is the employer of the driver.

Teams public liability insurance policies are designed to provide indemnity against claims for personal injuries in connection with the existence, maintenance, or use of teams on account of accidents to persons not employed by the assured.

Teams property damage insurance policies are designed to provide indemnity against claims in connection with the existence, maintenance, or use of teams on account of damage to property-not property of the assured or property of others.

when in care of the assured or his employees or when carried by his vehicles.

PREMIUMS CHARGED. The premiums charged by the insurance carriers are generally calculated at a rate per annum, the drivers' average wages being the basis of determining the number of team-days. The number of team-days is determined from the payroll when teams are owned by the contractor, and from invoices or other records showing the payments made as hire to the owner of the teams rented.

Automobile Insurance

If trucks or automobiles are employed, proper automobile insurance should be carried to cover :

1. Loss through fire or theft.

2. Loss from accidents to persons.

3. Property damages, covering claims for damage to property of others.

4. Collision insurance, covering damage to the truck or automobile which results from its collision with any other object.

Tornado Insurance

Tornado insurance, that is, protection against damage caused by windstorms, should be carried whenever an operation is being constructed in a section where these are likely to be very severe and work is susceptible of damage.

Premiums charged are based at a stated rate per $100 of the amount of insurance carried.

Earthquake Insurance

Earthquake insurance protects against losses resulting from earthquakes, the premiums being at a stated rate per $100 of the amount of insurance carried.