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Construction Industry Trends and Predictions Through 2021 and Beyond: Insurance and Emerging Threats

A 2021 survey identified three key issues impacting the construction industry in 2021: (1) the financial health of contractors; (2) the continuing risk of the pandemic; and (3) technology driving productivity, but also increasing the risk of cybersecurity threats. With this backdrop, insurance premiums in the construction industry are generally on the rise in 2021.

Overmyer Hall Associates, as a Columbus-based commercial insurance broker, provided the following rate outlook for 2021:

Type of Insurance

Rate Increase Outlook

Property

+5% to 10%

Contractors Equipment

Flat to +10%

General Liability

+5% to 15%

Builders Risk

Flat to +5%

Builders Risk – Frame

+10% to 20%

Umbrella/Excess

+10% to 20%

Executive Risk – EPL, Crime, Fiduciary, Cyber

+10% to 25%

Overmyer explained that builders risk insurance rates related to large frame projects (e.g. large hotels, multifamily complexes) have been on the rise because, generally, the number of carriers in the marketplace is shrinking. Moreover, there are an increased number of terms and conditions placed on larger frame projects by underwriters, such as specific and intensive security guidelines. Overmyer does not project the builders risk insurance in large frame projects will change anytime in the near future.

Another area of coverage with rates on the rise is cybersecurity. With the adoption and integration of technology in the construction industry, there has been an uptick in cyberattacks. For example, in early 2020, Bird Construction, a major Canadian Military Contractor, was a victim of a Maze ransomware attack in which hackers demanded approximately $9MM in exchange for a decryption key. Cyberattacks can result in, among other things: downtime on a project, breach of intellectual property, breach of bid data, and potential property damage. As these attacks become more widespread and sophisticated, cybersecurity insurance rates continue to rise at a higher rate.

To prevent cybersecurity threats and/or potential attacks, contractors are encouraged to have a risk assessment conducted by an IT professional, which can sometimes be coordinated through the contractor’s CPA. Other internal measures that contractors can take to defend against cybersecurity threats include: (1) providing training and information about cybersecurity to employees; (2) implementing multifactor authentication (MFA) to mitigate exposure when employees do make mistakes; (3) protecting sensitive data against back-end access in web applications; and (4) having a comprehensive, multifaceted strategy for addressing security needs. Even with the rise in rates, those in the construction industry should obtain and maintain cybersecurity insurance in the event of a potentially crippling cyberattack. 

For additional questions, please contact Construction Law Attorney Krista D. Warren at kdwarren@bmdllc.com.

The Masks Are Back: New OSHA Regulations for Healthcare Employers

Employment Law After Hours is back with a News Break Episode. Yesterday, OSHA published new rules for healthcare facilities, including hospitals, home health employers, nursing homes, ambulance companies, and assisted living facilities. These new rules are very cumbersome, requiring mask wearing for all employees, even those that are vaccinated. The only exception is for fully vaccinated employees (2 weeks post final dose) who are in a "well-defined" area where there is no reasonable expectation that any person with suspected or confirmed COVID-19 will be present.

New OSHA Guidance for Workplaces Not Covered by the Healthcare Emergency Temporary Standard

On June 10, 2021, OSHA issued an Emergency Temporary Standard (ETS) for occupational exposure to COVID-19, but it applies only to healthcare and healthcare support service workers. For a detailed summary of the ETS applicable to the healthcare industry, please visit https://youtu.be/vPyXmKwOzsk. All employers not subject to the ETS should review OSHA’s contemporaneously released, updated Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace. The new Guidance essentially leaves intact OSHA’s earlier guidance, but only for unvaccinated and otherwise at-risk workers (“at-risk” meaning vaccinated or unvaccinated workers with immunocompromising conditions). For fully vaccinated workers, OSHA defers to CDC Guidance for Fully Vaccinated People, which advises that most fully vaccinated people can resume activities without wearing masks or physically distancing, except where required by federal, state, or local laws or individual business policies.

Employer Liability for COVID-19 Vaccine Side Effects

As employers encourage or require employees to obtain a COVID-19 vaccine, they should be aware of OSHA recording obligations and potential workers’ compensation liability. Though OSHA has yet to revise its COVID-19 guidance in response to the latest CDC recommendations, OSHA has revised its position regarding the recording of injury or illness resulting from the vaccine. Until now, OSHA required an employer to record an adverse reaction when the vaccine was required for employees and the injury or illness otherwise met the recording criteria (work-related, a new case, and meets one or more of the general recording criteria). OSHA has reversed course and announced that it will not require recording adverse reactions until at least May 2022, irrespective of whether the employer requires the vaccine as a condition of employment. In its revised COVID-19 FAQs, OSHA states:

The New Rule 1.510 - Radical Change for Summary Judgement Procedure in Florida

In civil litigation, where both sides participate actively, trial is usually required at the end of a long, expensive case to determine a winner and a loser. In federal and most state courts, however, there are a few procedural shortcuts by which parties can seek to prevail in advance of trial, saving time, money and annoyance. The most common of these is the “motion for summary judgment”: a request to the court by one side for judgment before trial, generally on the basis that the evidence available reflects that a win for that party is legally inevitable and thus required. Effective May 1, 2021, summary judgment procedure in Florida has radically changed.

Vacating, Modifying or Correcting an Arbitration Award Under R.C. 2711.13: Three-Month Limitation Maximum; Not Guaranteed Amount of Time

In a recent decision, the Supreme Court of Ohio held that neither R.C. 2711.09 nor R.C. 2711.13 requires a court to wait three months after an arbitration award is issued before confirming the award. R.C. 2711.13 provides that “after an award in an arbitration proceeding is made, any party to the arbitration may file a motion in the court of common pleas for an order vacating, modifying, or correcting the award.” Any such motion to vacate, modify, or correct an award “must be served upon the adverse party or his attorney within three months after the award is delivered to the parties in interest.” In BST Ohio Corporation et al. v. Wolgang, the Court held the three-month period set forth in R.C. 2711.13 is not a guaranteed time period in which to file a motion to vacate, modify, or correct an arbitration award. 2021-Ohio-1785.