Construction Law Today : Construction Lawyer & Attorney : Joshua Glazov : Design Build Contracts, Construction Bankruptcy

If you've been around construction contracts or architects agreements for a while, you've heard someone mention "subrogation."  So what exactly is subrogation and how does it work?

Subrogation is pretty simple, yet it defies clear explanation. Here's one attempt:

Subrogation is a method whereby one who had involuntarily paid a debt of another succeeds to the rights of the other with respect to the debt paid

Hugh??

OK, maybe subrogation is one of those things better explained by example.

Continue Reading...

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

The Cooperator's Erik D. Nevala-Lee reports in Green Building Insurance Practices on new insurance for building green and designing green. The principal focus:

• Professional errors and omission insurance for architects and engineers whose designs don't meet LEED requirements specified by owners
• Casualty insurers who will pay claims to re-build damages or destroyed property to be greener and more energy efficient

Mr. Neval-Lee specifically mentioned Fireman's Fund Insurance Company (a division of Allianz) and Lexington Insurance Company (a division of AIG). They're testing the market for new policies that pay to rebuild to higher environmental standard after a partial or total loss. Fireman's Fund's policy includes upgrading to LEED certified status by hiring a LEED accredited professional, as well as upgrading building materials and systems, like adding Energy Star appliances, roofing, plumbing, and heating and cooling systems.

• Email This
• Print
• Comments
• Share Link

The Texas House passed a bill (HB1657) in a 73-71 vote and sent it to the Senate.  If enacted, HB1657 will expand the types of claims injured construction workers can recover from property owners under Texas law.   

Earlier this year the Texas Supreme Court decided Entergy v. Summers.  Under that case, property owners who buy workers compensation insurance covering injuries to the employees of construction contractors they hire, in addition to their own employees, are immune from claims outside of those allowed under the Texas Workers Compensation Act.

In 2001, plant owner Entergy Gulf States, Inc. hired a contractor to work on one of their facilities.  One of the contractor's workers was injured while repairing a leak on a hydrogen generator.  The plant owner's workers compensation insurance policy covered the worker's injuries. 

The worker sued the plant owner.  The plant owner countered, saying they were immune from the worker's lawsuit under the Workers Compensation Act.  The Texas Supreme Court agreed. Because the plant owner's workers compensation insurance covered the worker's injuries, the plant owner enjoyed immunity under the Workers Compensation Act against the worker's lawsuit.

For several years Texas legislators have taken initiatives to amend the Workers Compensation Act.  The recent vote is the latest installment in their initiative.

The Entergy decision provides a lot of protection to those property owners whose workers compensation insurance insures injuries to their contractors' workers in addition to injuries to their own employees.  That protection will soon be gone if HB1675 passes the Senate and Governor Perry signs it.  

• Email This
• Print
• Comments
• Share Link