Risk Management

With many municipal facilities aging, it is not uncommon for members to pursue construction of a new building. While this is generally a major undertaking process that may involve architects, engineers, contractors, legal counsel, and certainly the citizens who ultimately approve funding for the project, don’t forget that PACIF can also play a key role.

Most contracts for new buildings are complex enough to require a thorough legal review. This very important step is often best performed by municipal counsel. In addition to construction details and specifying who is responsible for what, the contract will include detailed insurance requirements for the project – contractual obligations for both the contractor and the building owner (municipality). This is where PACIF can help by reviewing the contract’s insurance requirements and providing feedback on several elements, such as:

• the adequacy of the coverage limits that the contractor must maintain throughout the project,
• special language or clauses that unnecessarily attempt to transfer risk to the municipality,
• verifying that the municipality’s coverage limits meet the contract’s requirements, and 
• identifying who is responsible for providing builder’s risk insurance.

The contract detail about builder’s risk insurance is important. These policies cover losses to the building from a variety of perils while it is under construction and may also be extended to cover things like construction materials before they are installed, sewer backups, and materials in transit. This coverage has an important role in protecting the interests of both the building owner and the contractors until the building is occupied. Virtually every construction contract will require it, particularly the ones that use an American Institute of Architects (AIA) template.

The contract will typically specify whether the builder or the building owner (municipality) will obtain and maintain the builder’s risk coverage. If the municipality is responsible for purchasing this coverage, PACIF can help. Working with our external insurance partners, we can obtain competitive quotes for coverage that meets your contractual needs.

In summary, when your municipality has received approval to build a new facility, or will be making major renovations to an existing facility, remember to contact PACIF so that we can review the contract  from an insurance perspective to make sure it has appropriate coverages, limits, and risk transfer language. We are here to protect your interests. After the contract is signed, we can help you obtain builder’s risk coverage if you are required to do so. Not buying builder’s risk insurance when you are contractually required to do so unnecessarily exposes your municipality and PACIF to substantial liability risk.
For assistance with contract reviews or getting builder’s risk insurance, contact a member of PACIF’s underwriting team at 800-649-7915 or underwritingdept@vlct.org.

Fred Satink, Deputy Director, Underwriting and Loss Control
VLCT Risk Management Services

Winter conditions come every year, whether they come in abruptly during November (or even the end of October) or slowly creep in sometime in December, we all know that throughout the winter roads will need to be plowed, snow and ice will affect our footing, and cold spells could wreak havoc on municipal buildings, heating systems, and even plumbing. Winter always brings certain types of claims, and taking steps to prevent them reduces risk to people and property. To help you manage this season’s related risks, we offer an overview of some common winter claims – and strategies to prevent them. 

Water Leaks from Burst Water Pipes or Sprinkler Systems  

The first major cold spell can result in frozen pipes, which will often split and leak when thawed. This can affect standard water lines as well as lines for both wet and dry sprinkler systems.  

• Think ahead about known cold spots in your buildings and prepare to provide adequate heat wherever water or sprinkler lines run. In some cases, the preventive measure can be as simple as opening a closet door or turning on the heat. 

• Have your sprinkler system serviced by a qualified vendor at least annually. This service should include system tests and flowing water (as appropriate).  

• For dry sprinkler systems, learn where the system’s low spots are and make sure that your vendor drains the water and condensation from them as this is a common cause of freeze ups. 

• Use low temperature sensors such as those offered by Monnit. These are designed to provide email, phone, or text alerts when temperatures reach a designated level and can allow staff to intervene before temperatures drop to the freezing point. 

Heating Systems Maintenance and Building Monitoring 

• Heating systems are often challenged during the winter months. To ensure that they are dependable, safe, and energy efficient, be sure to have all heating systems inspected at least annually and regularly maintained by a qualified vendor.  

• Employ the use of water sensors in basement areas where water can collect near heating systems. Such devices can provide an alert that water is accumulating and allow staff to intervene before the system fails. 

PACIF supports the use of remote monitoring sensors and has partnered with Monnit, a premier provider of internet connected remote sensing systems. They are providing remote sensors and the additional required equipment to PACIF members at a reduced cost. In addition, PACIF is providing financial support for internet-connected sensing technology by making all related equipment eligible for the PACIF Grant program. Members are encouraged to reach out to their individual loss control consultant to discuss remote sensing technology and where it might be applied within their facilities. 

Plow-Related Risks 

Your plow drivers work in all weather conditions and are on the road when few others are. You cannot eliminate all risk, yet your highway department can take these steps to reduce their chance of accidents. 

• When attaching or removing plow blades for the season, workers must use common sense and should have assistive equipment, such as a plow blade lift tool (which is eligible for a PACIF Grant), to help prevent hand, shoulder, and back injuries, which can sometimes be quite serious. Safety toe boots are also necessary when engaging in any highway crew activities, including the removal of plow blades. 

• Perform pre-season equipment and vehicle maintenance. Have drivers check all vehicle safety equipment – lights, strobes, wipers, defrosters, communications equipment, and tires – before every work shift. While these inspections should be performed routinely as part of regular pre- or post-trip activities, it is even more critical during the winter months. Repair or replace damaged equipment promptly. 

• Before winter arrives, supervisors should ensure that highway drivers get experience operating their designated vehicle, pre-drive their assigned plow routes with the plow (and wing) attached, and mark obstacles on their routes. Do not let their annual “shakedown” ride be in adverse weather! 

• When the snowstorms linger, supervisors need to monitor driver fatigue, especially in long or successive storms with extended periods in the driver’s seat. Make it a priority to check in regularly with drivers to evaluate their fatigue levels. Selectboards can support this by being willing to use contracted help at times when the municipal highway crew is too tired to drive safely. 

Slips, Trips, and Falls 

Every year, 25 to 30 percent of all PACIF workers’ compensation claims are related to employee slips, trips, or falls. On average, PACIF spends more than $250,000 annually on employee injuries that arise from slips, trips, or falls. PACIF also receives liability claims from members of the public who slip, trip, or fall on municipal property. Many of these events occur during winter months, so consider the following ways to reduce the risk of winter related injuries. 

• Slips and falls frequently occur when employees get in and out of vehicles. Operators of trucks and heavy equipment should, in all seasons, face the vehicle whenever entering or exiting it. In winter, it is particularly important that they clear as much snow and ice off steps, grab bars, etc. as possible – and report any damaged equipment so the problem can be repaired.  

• Proper footwear is important to wear year-round and is even more so during winter months. Highway personnel should wear safety-toed winter boots with a lug sole during the winter months. First responders should wear season-appropriate footwear with an anti-slip sole. Both groups would benefit from using Yaktrax or similar over-the-shoe anti-slip devices. Recent advances in footwear sole materials (such as Vibram “Arctic Grip” soles) may be of particular benefit to law enforcement and EMS personnel.  Another easy to apply ice cleat, is a mid-sole ice cleat that can be easily  activated for grip or non-activated simply by twisting around your boot or shoe. 

• Pay extra attention to maintaining all building entrances and exits, parking lots, and walking paths near and around buildings. Sanding and salting, in addition to plowing, is necessary to reduce slips and falls. If you use a contractor to maintain these areas, check the service contract and make sure it is explicit about the frequency of maintenance during storms.  

• Monitor floors just inside building entrances, where melting snow and slush create slippery areas. Use large absorbent floor mats to catch this snow and water to avoid slips. During storms, you may need to post special signs to warn people of a slippery floor. 

Winter will arrive any day now, so it is best not to delay your preparations. Taking the time now to evaluate each of the issues outlined in this article will a go a long way to keeping your employees, vehicles, facility users, and structures safe. For more winter loss prevention ideas, reach out to your loss control consultant or email us at losscontrol@vlct.org. We are always available for you.