Category: Contractors - Construction

SIC CODE: 1791 Structural Steel Erection

NAICS CODE: 238120 Structural Steel and Precast Concrete Contractors

238130 Framing Contractors  

Suggested ISO General Liability Codes: 97652, 97654, 97655

Suggested Workers Compensation Codes: 5057, 5069, 5059, 5040

Description of operations: Steel erection contractors build, repair, or maintain the steel framework for buildings and other structures, including high-rise apartments and offices, industrial complexes, and warehouse buildings. Much of their work is structural and load bearing. The hazards vary considerably depending on the size of the job and the number of stories. While steel is flexible, it can corrode in humid climates and can lose strength at high temperatures, which could result in collapse. Operations may involve the use and placement of heavy steel girders and I-beams. These may be welded together or fastened with bolts or hot rivets.

Property exposures at the contractor's own location are generally limited to those of an office, shop, and storage of materials, equipment, and vehicles. Ignition sources include electrical wiring, heating, and air conditioning systems. The exposure increases if fabrication, which includes cutting and welding, is done on premises. Welding involves the use of tanks of gases that must be stored and handled properly to avoid loss. The absence of basic controls such as chained storage in a cool area and the separation of welding from other operations may indicate a morale hazard. Some material may be stored but it is not susceptible to damage by fire or weather.

Crime exposure is from employee dishonesty. Background checks should be conducted prior to hiring any employee. All orders, billing, and disbursements must be handled as separate duties and annual external audits conducted. All items should be physically inventoried on a regular basis to prevent theft.

Inland marine exposures include accounts receivable if the contractor bills customers for services, computers, contractors’ tools, and equipment, including scaffolding, hoists, and portable welders, goods in transit, installation exposure, and valuable papers and records for customers' and suppliers' information. The contractors’ equipment schedule can include large cranes used to put beams in place.  Equipment and supplies are subject to drop and fall from heights, especially when lifting girders or beams above ground. Since any accident may trigger both the equipment and installation coverages, as well as possible third-party liability, many contractors prefer to hire a crane with a licensed operator. Goods in transit consist of tools and equipment as well as materials owned by either the insured or the customer for installation at the job site. I-beams and girders are usually drop shipped to the site by the manufacturer. If the insure transports these, special equipment is necessary due to the length of the beams. Materials are not highly susceptible to damage in transit. An installation floater will be needed if the materials to be installed are delivered to the site in advance of the installation. Hazards to machinery, tools, or building materials left at job sites and awaiting installation include theft, vandalism, damage from wind and weather, and damage by employees of other contractors. Some construction supplies may be target items for theft by third parties or employees.

Premises liability exposures at the contractor’s office are generally limited due to lack of public access.

At the job site, steel erection always involves work at heights. Persons and property may be injured by falling objects, especially when work is done near existing structures or residences. Pedestrians and vehicles must be protected from falling objects through barricades and netting. Welding, cutting, and riveting may cause fires or serious injuries to the public or other contractors’ employees. Repair and maintenance work may entail closing roads and redirecting traffic. Improper signage or barricading could result in a vehicle collision and catastrophic loss of life. Both the structure under construction and the equipment (such as cranes) may create an attractive nuisance hazard to children who enjoy climbing. All equipment must be disabled when not in operation to prevent untrained individuals from using it. Fencing must be in place with appropriate warning signs to prevent trespassing.

Completed operations liability exposure is potentially severe should a structure collapse due to the number of people who could be injured or killed and the potential for damage to the property of others. The designer and engineer of the project, the quality of materials, and the integrity of the completed structure are all critical. The absence of an aggressive quality control program that documents full compliance with all construction, material, and design specifications may indicate a morale hazard and make it impossible to defend against serious claims. Any changes made by the engineers and carried through in the design must be noted prior to implementation. Hazards may increase in the absence of proper record keeping of work orders and change orders, as well as inspection and signed approval of finished work by the customer.

Professional liability exposures may be serious if the insured does design work or alters plans.

Automobile exposures can be high due to the transport of girders, beams, equipment, machinery, and supplies to and from job sites. Drivers should be properly trained to prevent overturn and to navigate through high traffic areas. Serious property damage or injury to employees of other contractors, passing pedestrians, or motorists can arise during loading, transport, and unloading equipment and materials. Long drives with oversized equipment may lead to driver fatigue and resulting accidents.

For long-term projects away from home base, personal use of company vehicles poses a concern. Similarly, employees may use their own vehicles on company business for long periods, especially to transport crews to the jobsite.

Workers compensation exposure can be severe. Erection work always involves work at heights, with danger from falls or from falling objects. Sudden changes in wind or weather can make hoists and scaffolding less safe. Lifting and back injuries, hernias, sprains, and strains can occur from loading or unloading machinery or setting up structural parts. Collapse of or overturn of equipment may result in severe injury or death from crushing or suffocation. Common hazards include slips and falls, foreign objects in the eye, hearing impairment from noise, cuts or puncture wounds, bites from insects or vermin, and exposure to pollutants. 

Minimum recommended coverage:

Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Contractors’ Equipment and Tool Floaters, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Umbrella Liability, Business Automobile Liability and Physical Damage, Hired and Nonownership Auto Liability, Workers Compensation

Other coverages to consider:

Building, Business Income with Extra Expense, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Installation Floater, Cyberliability, Employment-related Practices Liability, Environmental Impairment Liability, Professional Liability, Stop Gap Liability, Unmanned Aerial Vehicles (UAV) (Drones)