Hundreds Gather to Discuss Insurance-Related Issues at Tappan Zee Bridge Site

Insurance professionals from both sides of the Tappan Zee Bridge and across the Hudson Valley convened recently at the Professional Insurance Agents of New York State Inc.’s Hudson Valley Regional Awareness Program at the Doubletree Hotel in Tarrytown.

“Hudson Valley RAP has become an institution over the past decade, almost as much as the Tappan Zee Bridge itself,” said PIANY President Anthony A. Kubera, CIC. “It’s not a coincidence that today’s event has a thematic thread that involves the Tappan Zee. It is a concrete and symbolic representation of two issues that PIA has put on the top of its efforts: certificates of insurance and New York’s unique Labor Law, 240/241(a).”

During his inaugural address, Kubera encouraged PIANY members to get involved in PIA’s legislative efforts, including their local District Office visits, going on now, as well as their area Advisory Council meetings. “Come see what hap- pens at PIA—hear what we are doing, and share what you, as a professional, are experiencing. Tell us what you need. We want to hear from you; we need your input and your participation because PIA’s ability to move quickly when change occurs, to recognize and respond to our members, relies on the input you give us.”

Certificates of insurance, and the impact of the improper use of them, was one of the featured topics of this year’s Hudson Valley RAP, in addition to New York State’s Scaffold Law and the Tappan Zee Bridge construction project.

The daylong event featured an award presentation; education sessions; a trade show featuring some 50 exhibitors; an address by newly elected PIANY President Kubera, CIC, of Russell Bond & Co.; and more.

Keynote address

Keynote speaker Rockland County Executive Ed Day, discussed how insurance rules and policies—including New York’s Scaffold Law—are taking a part in the Hudson Valley’s biggest reconstruction project of the century—the replacement of the Tappan Zee Bridge, the largest construction project in New York state history ($3.9 billion).

According to Day, the Scaffold Law costs New York taxpayers about $785 mil- lion annually. Local governments pay higher costs for capital projects—such as the Tappan Zee Bridge—whether the work is done directly or through private contractors. In fact, it’s estimated that $2 to $4 mil- lion of the cost of the Tappan Zee Bridge is because of the Scaffold Law.

“Liability costs for one joint New York- New Jersey bridge project are more than double on the New York side than on the New Jersey side—approximately $22 mil- lion, compared to $10 million,” said Day. “More than half of the top-30 settlements resulted from Scaffold Law claims and of those settlements 25 percent were against public entities. As taxpayers, we bear that cost.”

Day said that Scaffold Law-related cases are up 500 percent in New York State since 1990, even though the rate of workplace injury has decreased in the same time.

“The Scaffold Law has driven insurance costs through the roof, resulting in higher premiums, more coverage exemptions and fewer carriers in the market,” he stated. In short, New York’s unique Scaffold Law has a tremendous impact on every aspect of the Tappan Zee Bridge project and is critically important for insurance professionals to understand its unique legal and financial implications.”

He encouraged everyone in the room to reach out to their state representatives to advocate for changes to the Scaffold Law. In preparing for his speech, Day said he talked to someone who is knowledgeable about it. “It was eye-opening to me as an elected official, so I think it’s important that you advocate with your state representatives to get this law changed.”

During the luncheon, Frances A. Scott, chair of the Hudson Valley RAP Committee, presented Cal Durland, CPCU, with the Industry Professional of the Year award. Durland is director of industry relations for ACORD.

This award recognizes an individual from an insurance company, general agency, managing general agency or other insurance industry profession, who has demonstrated qualities that foster a strong working relationship with agents and brokers, and who has exemplified a commitment to professionalism and service.

As she introduced Durland, Scott said, “She was a leader in developing the ACORD 855 form; the product of an industry-wide effort to help insurance agents and their construction clients deal with the requests of third-parties for certificates that may misrepresent that coverages exist in insurance policies.”

“As I led the ACORD User Group Information Exchange, which is an agent- led community of ACORD, I’ve found out all the opportunities where we can help the agents to grow their business and service their clients,” said Durland, as she accepted her award. “So ultimately ACORD is forms and standards, but it’s about helping you with work coefficiency.”

Education

RAP participants, who needed valuable continuing-education credits, were able to choose from two classes. In the morning session, PIANY past President Richard A. Savino, CIC, CPIA, and Tom Tripodianos, Esq., led The Impact of New York Labor Law on Construction Insurance.

During their discussion, Savino and Tripodianos presented different scenarios in which agents need to send their clients to other experts (e.g., doc- tors and lawyers), rather than do things (e.g., send sample language of contracts), that could get them in trouble later.

“We are not attorneys,” said Savino. “As insurance folks, we need to stay out of it. You can’t rely on your E&O coverage to protect you later.” To help agents protect themselves, Savino said that once an agent agrees to review a contract for a client, the agent should send the contractor a dis- claimer that states that the agent can only review the contract’s insurance requirements, not the contract itself.

In the afternoon, Cathy Trischan, CPCU, CIC, CRM, AU, AAI, ARM, CRIS, MLIS, discussed Insuring New York Contractors–The E&O Perspective.

From an errors-and-omissions perspective, Trischan said it is important for agents to have detailed conversations with their contractor clients to better assess their insurance needs and protect themselves from E&O claims.

According to Trischan, agents need to look beyond what their clients are doing now and review the projects they’ve done in the past—to make sure they have the necessary completed operations coverage. She said agents should also check to make sure they are using the same definitions (e.g., how does the client define a story?).

Offering advice about how to handle a client who doesn’t seem to care about his or her insurance coverage, Trischan said, “It all comes down to disclosure. Coverage check- lists are a good idea and can help you defend your agency when a claim comes along.”

At the morning’s PIA benefits discussion, Kubera and PIANY Director of Government & Industry Affairs Matthew F. Guilbault, Esq., discussed how PIA pro- vides members with an expert legal review of members’ agency/company contracts. Agents interested in taking advantage of this PIA-member benefit should email PIA’s Industry Resource Center at resourcecenter@pia.org.

“It is crucial that agents know what advantages and disadvantages to look for when reading agency agreements,” said Guilbault. “By knowing what to look for, agents are able to choose the best opportunities available at the present and look for better opportunities in the future.”

During the presentation, Guilbault reviewed the basic parts of every agency/company contract—definitions, ownership of the book of business, forfeiture of ownership, commission, termination, successor clause, contingency agreement, etc.—and the importance of having everything in writing.

If an agent disagrees with a con- tract’s provisions, the agent should tell the company, in writing, before signing the contract and try to negotiate a resolution. “This practice often results in agency agreements that are more beneficial to independent agents and insurance companies. Insurance companies will realize that to secure superior agents, they should draft their agency agreements to address the concerns of both the agent and the company,” said Guilbault.

Networking

Hudson Valley RAP provided participants with ample time to catch up with old friends and make new business contacts. The trade show gave people the chance to see the latest innovations, products and markets.

The PIANY-Young Insurance Professionals’ networking reception ended this year’s event and gave attendees one last chance to meet up with colleagues.

For more information on this year’s event—and to see videos and photos—log on to the PIANY website (pia.org).

Plans are already under way for next year’s Hudson Valley RAP, watch your PIA publications for details.