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Without warning, an under-construction structure in the southern United States suffered a catastrophic collapse. The tragedy resulted in the death of several people. As a result, engineering and construction post-collapse forensics experts engaged in an 18-month investigation.

Those involved in the design and build project included the general contractor hired by the owner, a prime engineer, a consulting peer-review engineer and a prime structural design firm supported by a sub-consulting structural engineer. Although significant cracking was noticed several weeks before the failure, no one sounded the alarm or deemed the cracking worthy of corrective action.

In their findings, forensic experts found the collapse resulted from the combined failure of the general contractor, engineers and even the owner, who all failed to shut down the work once the cracking reached unacceptable levels and/or take the appropriate actions needed to secure the public safety and mitigate the risk. This was even after the general contractor requested that the engineer-of-record and design manager assess the structure’s extreme cracking. Consequently, the choice to not seriously investigate the crack or seek an independent peer review to design a rectification plan contributed directly to the tragedy. This is typically referred to within the industry as a “negligent professional design error.”

In fact, even though the lead forensics investigator stated that there was a definite problem....no one responded with the required urgency. The simple truth is that when the cracks reached unacceptable levels, oversight protocols should have been enacted to suspend work and close nearby roads. This was the construction manager’s responsibility regardless of whether he or she was hired by the owner or a member of the general contractor team.

From the details presented, it appears that both negligent wrongful design acts and errors as well as negligent wrongful construction management errors played a significant role in the collapse. Assuming the parties alleged to have caused the collapse had professional liability policies, here is how the exposures and resulting tragedy could have been addressed after the collapse occurred.

Under such conditions, the engineering professionals should have immediately notified their brokers and carriers of the potential claims. This includes citing the alleged negligent professional wrongful acts involved in the collapse in relation to the design, its oversight and the failure to adhere to established professional standards of care. 

Another important element is the definition of professional services in the engineer’s policy. Ideally, this language would carefully detail and define the extent of the engineering, land surveying, construction management, program management and technical consulting services (in the case of the collapse, the negligence in not addressing the reported design flaws); design and construction consulting (as in the failed peer reviewing of original plans and specifications); and the use of technology services (any structural analysis software). 

Other considerations involve the possible containment of crisis management coverage, which would have paid the expenses of media consultants and their dealings with the press and public, as well as punitive damage terms and conditions as allowed by local insurance laws. However, given the catastrophic failure of the structure, it is highly unlikely that the policies held by the engineers engaged would have possessed policies containing the limits of coverage needed to pay the damages and losses assessed. 

Optimally, the project’s general contractor and subcontractors should have had contractor’s professional and pollution liability coverage. As with engineers, the contractors should have had a broad definition of covered professional services, especially construction management. While it does appear that the general contractor did report the cracking weeks before the collapse, little if anything was done to either further investigate or alleviate the problem. Subsequently, the work was not stopped and the structure collapsed. By all accounts, it appears the construction manager should have shut down the project and forced an evaluation before the job continued. In terms of professional liability insurance exposure, not doing so could have been seen as a negligent wrongful professional act when it comes to overseeing and ensuring the work’s structural integrity work. 

Unlike engineering policy forms, contractor’s professional liability policies cover the rectification of structural problems caused by professional and/or design errors. Under these conditions, if the general contractor had notified the carriers of the construction failures when first noticed, they might have been able to work together, identify and institute the proper corrections before the problem became catastrophic. In addition, if the contractor policy had protective indemnity coverage and if the contractor hired engineers to do shop-drawing changes to plans and specs, then the protective indemnity coverage could have been applied as an excess coverage that literally pays in excess of the engineer’s available policy limits and enables. The benefits are that the contractor could have received substantial financial relief as a result of the damages that likely exceeded the limits available through the engineer’s professional liability insurance.

While insurance may not provide all the answers, the proper policies when in place can provide the risk management assistance needed to overcome challenges before they become catastrophic in addition to deferring the costs associated with costly third-party claims, delays and the correction of structural deficiencies. There is no substitute for due diligence and the forethought to recognize the problems, both big and small, that plague nearly every jobsite. The trick is to thoroughly anticipate the potential risks and then plan accordingly with the appropriate, proven strategies well before the project even begins. 


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