Category: Contractors – Construction
NAICS CANADA CODE: 237310 Highway, Street and Bridge Construction
Description of Operations:
Street and road contractors build, maintain, or repair streets, highways and interstates. After the route is designed and the land cleared, road construction consists of grading and compacting the earth, laying a bed of gravel, laying down the subsurface road bed (usually of cast-in-place reinforced concrete), surfacing the road with pavement, and drying and curing. Road contractors may perform all of these operations, or just the sub-surface work. Bridges, underpasses and viaducts, and projects over or near water involve additional steps.
Property exposures at the road contractor’s own location are usually limited to an office and storage of material, equipment, and vehicles.
Hazards are very limited because this risk is an off-site contractor. There will be an office and possibly equipment and vehicle repair facilities and perhaps some material storage.
Inland marine exposures are from accounts receivable, construction equipment, materials in transit, installation floater, and valuable papers and records. Construction equipment is heavy and difficult to transport. The training of drivers and haulers, especially with respect to the loading, tie-down and unloading, is important to avoid damage to bulky equipment due to overturn or collision.
At the job site, hazards come from uneven terrain; tools and equipment may be damaged due to dropping and falls from heights, or being struck by other vehicles. Materials and equipment left at job sites may be stolen or vandalized unless proper controls are in place. The accounts receivable exposure could be significant if payments are made via instalments throughout the course of the project. Valuable papers and records usually consist of custom project plans. Copies should be kept at an offsite location for easier restoration.
Jobs may involve placement of large precast concrete deck segments manufactured off site, transported to the job, and lifted up onto bridge piers or other structures with a crane. Resulting hazards include instability due to overload, wind velocity, causing possible damage to both the crane and the building materials.
Occupier’s liability exposure is low at the contractor’s premises since visitor access is limited, but equipment stored in the open may present an attractive nuisance to children.
At job sites, the operation of heavy machinery and asphalt plants presents numerous hazards to the public and to employees of other contractors. Road contractors must contend with vehicular, bicycle, and foot traffic. The smoke, dust and noise generated by paving operations are often just nuisance hazards. The uneven ground, hot tar, and heavy machinery may result in serious injuries to passers-by and motorists, as well as property damage to adjacent vehicles, buildings and residences. Grading and trenching may result in damage to underground lines or piping, some of which may be catastrophic. Serious traffic accidents may occur in the absence of an appropriate barricading system and clear marking of streets and roads that are closed. The party responsible for warning signs, barricades and other precautions for drivers must be spelled out in any contract.
If the insured does road work on bridges there may be hazards to persons and property due to falling objects. Work near water also poses unique hazards.
Completed operations liability exposures can be very high. Attention must be made to the set and curing of the roadbed to ensure a solid foundation. The mixture of the cement and concrete and the materials used to harden and cure must meet the specifications regarding strength and hardness for the end use of the construction project. If the roadbed cannot support the required traffic, the entire road may shift or collapse. On bridges, underpasses and viaducts, this may result in severe consequences. On a land road, cracks or potholes may cause vehicle damage, traffic accidents, and expensive repairs.
Environmental impairment liability exposures may arise from the waste generated in the fuelling and cleaning of heavy equipment. Allowing waste to accumulate either at the job site or in the contractor’s yard could cause a severe environmental impairment situation. The insured must use safe methods to collect, transport, and dispose of the waste.
Professional liability exposures arise not only from the design of the project, but also from the interpretation by the insured’s engineers. Many contractors have engineers who do incidental draft work, such as water drainage channels or changes needed due to unexpected situations at the jobsite such as unusual land features or incorrectly marked electrical or gas lines. Quality control is an important factor, including documentation that specifications were followed and that the work was inspected and accepted by the customer.
Automobile exposures are high and road time can be extensive. Serious property damage or injury to passing pedestrians or motorists or to employees of other contractors can arise during loading and unloading of equipment and materials. Similar hazards are posed if trucks are used for grading of land or dump trucks are used for hauling sand and gravel. Long drives with oversized equipment may lead to driver fatigue and resulting accidents. Age, training, experience and drivers’ records, as well as the age, condition and maintenance of the vehicles, are all important items to consider. For long-term projects away from home base, personal use of company vehicles poses a concern. Similarly, employees may use their own vehicles on company business for long periods, especially to transport crews to the jobsite.
Workplace safety exposures can have many high potential loss opportunities. The most obvious potential for injury comes from vehicles during work on existing roads. Serious injuries or even fatalities may occur in the absence of an appropriate barricading system and clear marking of streets and roads that are closed. This type of operation has exposure to burns, chemical applications, smoke and fumes, back injury, hernia, sprain and strain and other lifting injuries. Cumulative exposure to the high-decibel operations may result in permanent hearing impairment. The use, misuse, maintenance, and transport of large, heavy machinery present unique hazards that need review. Digging and grading of land may result in injury from underground electrical cable or gas lines.
Work on viaducts, bridges, and ramps may involve some work at heights, with trip and fall hazards. Work over or near water and waterways poses significant exposures.
Minimum recommended Insurance coverage for road contractors:
Business Personal Property, Dishonesty, Disappearance and Destruction, Contractors’ Equipment, General Liability, Umbrella Liability, Automobile Liability and Physical Damage, Non-Ownership Automobile Liability
Other Insurance coverage to consider for road contractors:
Building, Business Income with Extra Expense, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, Employment Practices Liability, Environmental Impairment Liability, Professional Liability