Page 26: of Marine News Magazine (November 2011)

26MNNovember 2011INSURANCEConstruction is a complex business. Equipment can break down; employees can be injured; a project can go awry in unexpected ways. Add a marine ele- ment to the work underway, and the pitfalls that a contractor must navigateto manage risk become even more chal- lenging.Marine contractors have long understood that they need specialized coverage and have sought out ocean marine insurance carriers with the expertise to help them. Each project they bid on, however, can come with a variety of special requirements. As a result, marine builders seek an even higher level of insurance customization than is often required for the rest of the construction industry. What marine contractors need is an insurance product that draws from both the ocean marine and construction disciplines. By drawing from and blending the expertise and common practices of both ocean marine and con-struction underwriting, Travelers has produced a Marine Construction product that provides contractors with the coverage they need for many of their specialized expo- sures, as well as the flexibility they require to meet bid specifications that change from project to project. Travelers? new Marine Construction Program for Contractors comes with a commitment to serve an indus- try that needs regular interaction and consultation with agents and underwriters because of its very nature of doing business one contract at a time. By making sure every field underwriter has a common knowledge base, expanded general forms that address ocean marine expo- sures, and well-developed special coverages ready to go, Travelers has streamlined the process for marine contrac- tors. GETTINGTHE RIGHTCOVERAGE From an insurance perspective, marine construction often presents more challenges than land-based business. Standard commercial policies often exclude coverage for certain liabilities that pose significant risk to marine con- tractors. Looking at just a few examples can make it clear why finding the right coverage is a business imperative for any marine contractor, whether they are a well-versed vet- eran of maritime projects or a neophyte company just breaking into the field to broaden their target market and win new business. For example, take the marine construction business that wins a contract to widen the pedestrian walkway on adrawbridge. If the project requires the removal of a mechanical part that is taken offsite for repairs, an ocean marine policy would normally provide coverage while the mechanism was in the care, custody and control (CC&C) of the contractor. A typical standard commercial policy, however, specifically excludes CC&C, leaving the con- tractor on the hook if something happens to the part while it is offsite.Now move beyond this small example and imagine that a marine construction company has won the bid to build the marina for a new hotel development, with a dock that can accommodate 200 or 300 boats. The following kinds of exposures may come into play: With employees working on different aspects of the project, the contractor may be subject to different types of workers compensation laws: state Workers Compensation laws for land workers, the federal Longshore & Harbor Workers? Compensation Act for dock workers and those who assist on barges, in addition to the Jones Act for full-time vessel crew. It is critical that the contractor have coverage for all types of worker injuries, not just the ones covered by state laws. During construction activities that take place from tug boats, crane barges or other craft, someone else?s property may be damaged; for example, a construction vessel may inadver- tently scrape the hull of someone?s private boat while it is maneuvering near the dock construction area. If the contrac- tor does not have watercraft liability coverage, he/she most likely will have to pay to cover the damage out of pocket. In the construction context, standard protection and indemnity (P&I) insurance may only cover liability arising Building Expertise, Service into CoverageMarine Construction Policy By Ken Baldwin, Chief Underwriting Officer, Travelers Ocean Marine MN#11 (18-31):MN 2011 Layouts 10/27/2011 9:27 AM Page 26