Please see ORBA feedback …

Please see ORBA feedback (comments, questions, and recommendations) in regards to MTO TCP Notice. No. 000-0088 on: Revisions to SSP100F28 - Contractor's Insurance.

Supporting attachments where applicable are provided for information and reference.

Main areas of concern are the following:

1. Insurance requirements (such as property, pollution liability and wrap-up general liability) should be specified not left to “This insurance shall be in a form acceptable to the Owner” which is subjective and undetermined. It is impossible to price that in the market and results in an uneven playing field (assumptions made) for bidding and potential disputes after bid and award. Extensions, permitted exclusions and sub limits should be specified.

2. Property Insurance deductible of 1% maximum should be noted as “where commercially available”. It is achievable on the large projects, but there will be minimum deductibles applicable on smaller projects.

3. It is asking for coverage to be in the “joint names of the Contractor, the Owner and the Contract Administrator”. This is acceptable only for the Builders Risk and the Wrap Up (and is understood to mean named insureds), but not for the other coverages listed. By asking for this on the other coverages, the Contractor will not be able to evidence their Corporate Policies and will have to procure project specific Policies for each line of coverage – this would not be good value for money, costly and unreasonable. Only Additional Insured status should be provided for the Owner and the Contract Administrator for these other Policies.

4. It is asking for Replacement Cost coverage on buildings that are already in use for its intended purpose. The Contractor should not be responsible to insure a building that is operational other than for damage caused to the building as a result of their operations, which would then be a Liability issue not a First Party issue.

5. Builders Risk insurance requirements are unclear in stating “not less than 100% of the hard construction costs plus at least 25% of the total soft construction costs forming part of the Work”. The Contract Price will include hard and soft costs to perform the Contract to completion. Typically, the declared value for underwriting is the Contract Price, i.e., the price for the Work, unless there are specific soft costs in addition to the price of the Work such as delay in start up and recurring/continuing soft costs. The Contractor will want all hard and soft costs covered to reinstate and complete in the event of a loss. It is assumed that only the price of the Work is the basis for declared value and coverage, unless MTO specifically wants other “soft costs” included in coverage (and if it does it will have to declare those values for coverage). It is presumed this is not what MTO wants as this would pose a conundrum to bid.
- Please clarify

Additional Comments, and Questions:

Contractor’s Equipment Insurance All risks Contractors' equipment insurance shall be in the joint names of the Contractor, the Owner and the Contract Administrator, covering construction machinery and equipment
• A contractor’s equipment is insured for the entire company, all of the time, regardless of the project. Owners and CA’s are listed as additional insured on policies for each project. Why, and I am not even sure it is possible to get policies with joint names of the Owner and CA.

Builders Risk Insurance
• Define what hard and soft costs are.
• When will it be required? There is a tendancy for it to be requested in the incorrect circumstance.
• What is the builders risk covering? There are many items and activities in a contract that a builder’s risk policy does not cover, i.e., other insurance, topsoil, field office, many road items, interest.
• Do not make the deductible too low.

Option H: Wrap-up liability insurance is normally associated with large construction projects….. Wrap-up insurance is suitable for very large projects … What is large and very large defined as?
• Do not make the deductible too low.
There needs to be an Insurance Item in the tender.
• Most existing policies required, and now these new policies are paid up front, there has to be a mechanism to pay for them at the time the invoices are received by the contractor (prior to arriving on site).
• All builders risk policies, most wrap-up polices, and many environmental policies are a function of both time and volume, if the project is extended and/or value increased there has to be an item to refer to and a mechanism to compensate the contractor for changes to scope at the time of tender and original policy purchased.