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Liability concerns in New Orleans.

The liability pitfalls experienced during the World Trade Center site cleanup after the 2001 terrorist attacks are serving as a blueprint for caution among contractors and construction insurers tapped to help rebuild New Orleans.

The liability issues facing construction workers in the hurricane-ravaged city are of a much larger scale compared with Ground Zero, observers say.

While there are contractors already at work in New Orleans, many others are reluctant to get involved in a project of this magnitude unless they have insurance against what normally are quantifiable risks, said Paul Becker of broker Willis Group Holdings Ltd.'s North American construction group, during a Nov. 8 hearing before the U.S. Senate Committee on Environment and Public Works.

Uncertain site conditions, unknown health hazards such as chemicals that could be released during cleanup, and uncertainty of contracting provisions and legal environments are among the many risks that can't be quantified, Becker said.

"Carriers as well tend not to write policies if they are not able to make the necessary judgments. In the case of New Orleans, as it was with the World Trade Center, it will be almost impossible to establish the proper control procedures to protect their interest," said Becker.

Becker is urging the Senate to pass legislation that would provide reasonable levels of liability protection for construction and engineering firms working in the hurricane-ravaged regions.

According to the American Road and Transportation Builders Association, thousands of lawsuits have been filed against firms involved in the Ground Zero cleanup. Many of those contractors didn't carry adequate insurance to cover all potential risks, and those that did were threatened with loss of coverage because of the open-ended liability exposure they continue to face.

Michael Feigin, vice president of Bovis Lend Lease, a large construction firm that had about 250 employees working at the World Trade Center site. also testified before the Senate committee and urged legislators to put some protection in place to eliminate any question of response on the part of construction firms.

"Today, there are claims from over 5,000 individual claimants," Feigin told lawmakers. "These lawsuits claim injuries arising from or related to debris removal work at the WTC site following the collapse of the buildings on Sept. 11, 2001. The cases predominately involve allegations of respiratory and related injuries including asthma, chronic cough, chronic obstructive lung disease, pulmonary fibrosis and fear of cancer"

Some of these conditions already are present in New Orleans, said Becker, referring to "Katrina Cough," which local doctors attribute to mold and contaminated dust left behind by the floodwaters that have been stirred up by cleanup and demolition work.

LIABILITY LURKS: Contractors and construction crews face unquantifiable risks during the cleanup of New Orleans including mold.

Liability Protection Coverages Available for Construction Firms

* General Liability Insurance

* Contractors Pollution Liability

* Umbrella

* Excess Liability
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Author:Dankwa, David
Publication:Best's Review
Geographic Code:1U7LA
Date:Jan 1, 2006
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