NYCLA s Construction Law Committee. P r o g r a m M o d e r at o r : P r o g r a m F ac u l t y :

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1 n s t i t u t e I N Y C L A - C L E C onstruction I nsurance : W hat C onstruction C ounsel S hould K now Prepared in connection with a Continuing Legal Education course presented at New York County Lawyers Association, 14 Vesey Street, New York, NY presented on Tuesday, April 16, Program Co-Sponsor: NYCLA s Construction Law Committee P r o g r a m M o d e r at o r : Joel Sciascia, Pavarini McGovern LLC, Co-chair NYCLA s Construction Law Committee P r o g r a m F ac u l t y : Lawrence J. Bartelemucci, Anderson Kill & Olick, P.C. Joe Charczenko, Construction Risk Partners Josh Gold, Anderson Kill & Olick P.C. 3 TRANSITIONAL & NON-TRANSITIONAL MCLE CREDITS: This course has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 3 Transitional & Non-Transitional credit hours: 2 PP; 1 Skill This program has been approved by the Board of Continuing Legal Education of the Supreme Court of New Jersey for 3 hours of total CLE credit. Of these, 0 qualify as hours of credit for Ethics/Professionalism, and 0 qualify as hours of credit toward certification in civil trial law, criminal trial law, workers compensation law and/or matrimonial law.

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3 Information Regarding CLE Credits and Certification Construction Insurance: What Construction Counsel Should Know April 16, 2013; 6:00 PM to 9:00 PM The New York State CLE Board Regulations require all accredited CLE providers to provide documentation that CLE course attendees are, in fact, present during the course. Please review the following NYCLA rules for MCLE credit allocation and certificate distribution. i. You must sign-in and note the time of arrival to receive your course materials and receive MCLE credit. The time will be verified by the Program Assistant. ii. iii. iv. You will receive your MCLE certificate as you exit the room at the end of the course. The certificates will bear your name and will be arranged in alphabetical order on the tables directly outside the auditorium. If you arrive after the course has begun, you must sign-in and note the time of your arrival. The time will be verified by the Program Assistant. If it has been determined that you will still receive educational value by attending a portion of the program, you will receive a pro-rated CLE certificate. Please note: We can only certify MCLE credit for the actual time you are in attendance. If you leave before the end of the course, you must sign-out and enter the time you are leaving. The time will be verified by the Program Assistant. Again, if it has been determined that you received educational value from attending a portion of the program, your CLE credits will be pro-rated and the certificate will be mailed to you within one week. v. If you leave early and do not sign out, we will assume that you left at the midpoint of the course. If it has been determined that you received educational value from the portion of the program you attended, we will pro-rate the credits accordingly, unless you can provide verification of course completion. Your certificate will be mailed to you within one week. Thank you for choosing NYCLA as your CLE provider!

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5 New York County Lawyers Association Continuing Legal Education Institute 14 Vesey Street, New York, N.Y (212) Construction Insurance: What Construction Lawyers Need to Know Tuesday, April 16, :00 PM to 9:00 PM Program Co-sponsor: NYCLA's Construction Law Committee Moderator: Joel Sciascia, Pavarini McGovern LLC, Co-chair NYCLA's Construction Law Committee Faculty: Lawrence J. Bartelemucci, Anderson Kill & Olick, P.C.; Joe Charczenko, Construction Risk Partners; Josh Gold, Anderson Kill & Olick P.C. 5:30 PM 6:00 PM Registration AGENDA 6:00 PM 6:10 PM Introductions and Announcements 6:10 PM 6:30 PM Risk in Construction Joe Charczenko, Construction Risk Partners 6:30 PM 6:50 PM The State of the NY Construction Market Joe Charczenko, Construction Risk Partners 6:50 PM 7:10 PM Coverage Basics for Construction Insurance Joe Charczenko, Construction Risk Partners 7:10 PM 7:20 PM BREAK 7:20 PM 8:10 PM Contractual Specifications and Due Diligence Lawrence J. Bartelemucci, Anderson Kill & Olick, P.C. 8:10 PM 8:50 PM Navigating the Insurance Claims Process Josh Gold, Anderson Kill & Olick P.C. 8:50 PM 9:00 PM Questions and Answers Panel

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7 New York County Lawyers Association Continuing Legal Education Institute 14 Vesey Street, New York, N.Y (212) Construction Insurance: What Construction Lawyers Need to Know Tuesday, April 16, :00 PM to 9:00 PM Program Co-sponsor: NYCLA's Construction Law Committee Moderator: Joel Sciascia, Pavarini McGovern LLC, Co-chair NYCLA's Construction Law Committee Faculty: Lawrence J. Bartelemucci, Anderson Kill & Olick, P.C.; Joe Charczenko, Construction Risk Partners; Josh Gold, Anderson Kill & Olick P.C. Table of Contents New York Construction Insurance Market Update & Understanding Your Risk Management & Insurance Programs By Joe Charczenko, Construction Risk Partners Construction Insurance Outline By Lawrence J. Bartelemucci, Anderson Kill & Olick, P.C. Construction Claims Checklist By Josh Gold, Anderson Kill & Olick P.C. Articles Minimize Risk in Renovation Projects, By Lawrence J. Bartelemucci Property Insurance and Disaster Recovery After Sandy, By Joshua Gold and Lawrence J. Bartelemucci Understanding Time Sensitive Provisions, By Joshua Gold The Special Perils of Insurance Coverage, By Joshua Gold Accessing Your Excess Insurance, By Joshua Gold Faculty Biographies

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9 4/11/2013 New York Construction Insurance Market Update & Understanding Your Risk Management & Insurance Programs Joe Charczenko Partner April 2013 Program Agenda Risk in Construction State of the NY Construction Market: Impact on Legal Community Coverage Basics for the Construction Industry 2 1

10 4/11/2013 Contracting Risk Profile Build Build it Like the Picture Design Draw the Picture, then Build it Bank Buy the Paper, Draw it, then Build it Less Risk More Risk Project Delivery Methods CM at Risk Traditional Method #1 Design Bid Build Traditional Method #2 Design Build Design and Construction are Contracted Together to One Entity. Integrated Project Delivery (IPD) Design and Construction Teams are Contracted to Work Together to Deliver Project. Public Private Partnership (PPP) Project is Financed, Designed, Constructed, and Operated by Private Contracting Group. 3 Risk In Construction Construction is Risky Business: Complex Project Finance Challenging Labor Markets Contractual Litigiousness Evolving Supply Chain Exposure to Unsafe Conditions Constantly Changing Case Law 4 2

11 4/11/2013 Risks on Construction Projects Lending & Banking Project & Contractor Labor Shortage or Strike Union & Open Shop Permitting & Political Issues Vary by Project Numerous Complex Contracts Jurisdictional Variances 5 Risks on Construction Projects Design Errors Evolving Technology Constructability Issues New Materials & Processes Unknown Site Conditions Environmental Remediation Contractor / Supplier Default Banking Impact 6 3

12 4/11/2013 Risks on Construction Projects Quality Control: Construction Defect Material Availability Supply Chain Schedule Project Completion Natural Disaster 7 Risks on Construction Projects Life, Safety & Health: Construction Trades Public Exposure Cranes / Hoists 8 4

13 4/11/2013 New York Construction Insurance Market Update Joe Charczenko Partner April 2013 NY Construction Insurance Market The Perfect Storm for Insurance Companies: Economic Downturn The Carriers have Received Less Premium Worker s Compensation Reform (2007) The Reform Hurt the Profitability of the Carriers NYS Labor Law 240 Claim Values Continue to Rise in Frequency and Severity Poor Investment Returns Carriers Need More Underwriting Profit These Factors Have Created a Capacity Shortage for NY Construction Risks 10 5

14 4/11/2013 NY Construction Insurance Market What s Different About this Hard Market : Driven by Loss Portfolio s of NY Construction Risk: Workers Compensation General Liability Umbrella Capacity is Available, but Carriers are Choosing Not to Deploy It Not Currently Impacting Other Business Sectors or Geographies in a Significant Way 11 NY Construction Insurance Market What is the Impact of this Market Shift? Construction Risks are Seeing Rate Increases Varies by Line, Program Type, Carrier, etc. Long Term Project Rates Have Increased Workers Compensation: Rates / Limits are Statutorily Driven General Liability (Primary): Rate Increases: Guaranteed Cost Between 10% and 100% Loss Sensitive Between Flat and 50% Umbrella Carriers Are Requiring Higher Primary Limits 12 6

15 4/11/2013 NY Construction Insurance Market What is the Impact of this Market Shift? Umbrella (Excess): Most Impacted Line of Business with Very Limited Competition / Capacity Significant Rate Increases 10% to 200% Raising of Attachment Points Mostly to $2M for Contractor Programs and $5M for Projects Captive Development Coverage Restrictions (mostly with 2nd Tier Markets): Action Over Exclusions Construction Defect Exclusions Subcontractor Warranties Residential Exclusions 13 NY Construction Insurance Market Impact to Legal Community: Added Emphasis on the Contract Impact on Procurement Project Insurance (CIPs) Large Deductibles / SIRs Exclusions Impact on Claims Exclusions Completed Operations 14 7

16 4/11/2013 Coverage Basics for the Construction Industry April 2013 WORKERS COMPENSATION 1 st Party Coverage Workers Comp (Part #1): Job related injuries to employees Benefits are statutory Covers lost wages and medical expenses Subcontractor employees who are uninsured Employer s Liability (Part #2): Covers imposed liability for employee injuries in course of job not covered by Part #1 Covers suits from spouses or dependents Has 3 rd Party Component Coverage Exceptions: Subcontractor employees with workers comp coverage State specific willful misconduct states No coverage for lost time conducting accident investigations, paperwork, reporting, lost productions, etc. Pricing: Experience Modifier (EMR) 3 year look back, excluding current Compares company loss performance versus like contractor experience < 1.0 = Better than Average > 1.0 = Worse than Average Other Factors: Payroll (Amount, Type & Location) Safety Programs & Controls 16 8

17 4/11/2013 GENERAL LIABILITY 3 rd Party Coverage Covers Bodily Injury & Property Damage (BI/PD) or Advertising Injury to 3 rd Parties Arising Out of: Job site operations Office locations Completed Operations Defense is Typically Outside Coverage Limits Common Claims: NY Labor Law Construction defect Loss of use for owner s property Common Policy Exclusions: Residential, Mold, EIFS, Lead, Silica EPLI, PL, Pollution NOTE: Sub policies can have major gaps Typical Coverage Exceptions: Intentional acts Breach of contract Damage to client s work Repair of client s defective work Comp ops is intended to cover resulting damage (bodily injury or property) arising out of your defective work Pricing: Loss experience (3 7 years) Contractual risk management Contract wording: AI, indemnity Procedures: COIs, contract execution Exposure make up Volume (WIP & Sub), state, payroll Safety public and employee 17 AUTO & UMBRELLA AUTO: 1 st and 3 rd Party Coverages Physical Damage: Damage to vehicles (owned or leased) from perils such as collision, theft, fire or vandalism Auto Liability: BI/PD to 3 rd parties caused by an accident resulting from the ownership, maintenance or use of a covered auto Coverage Exceptions: Intentional acts Liability from use of construction equipment Pricing: Loss experience (3 7 years) Fleet safety, driver safety checks UMBRELLA: 3 rd Party Coverage Excess Capacity for: General Liability Auto Liability Employer s Liability Coverage: Typically follows the form of the underlying coverage Pricing: Premium paid on underlying coverages Market conditions Loss Control Procedures 18 9

18 4/11/2013 PROPERTY & BUILDER S RISK PROPERTY & EQUIPMENT: 1 st Party Coverages Physical Damage: Damage to property or equipment (owned or leased) from perils such as collision, theft, fire or vandalism Often includes office location and contents, trailers and equipment Coverage Exceptions: Loss of production and down time Normal wear and tear Mechanical break down Claim Issues: Claim must be triggered by occurrence Prompt reporting requirement Insurance company inspection Pricing: Value / Location Maintenance Procedures BUILDER s RISK: 1 st Party Coverage Covers Damage to the Work Direct & Indirect Limit Forms vary significantly by company Defined Limits for various perils Typical Exclusions: Faulty workmanship or design Mechanical breakdown, wear & tear Normal settling of building Consequential loss, liquidated damages Coverage Issues: Owner Purchased: GC / Subs a Named Insured Deductibles, Limits, Terms Pricing: Location, Schedule, Values 19 POLLUTION & PROFESSIONAL POLLUTION LIABILTY (CPL): 3 rd Party Coverages Covers BI/PD for Pollution Liability: Defense and clean up costs for events arising out of contractor operations Vicarious pollution liability from subs Defense is typically within limits Claims Made or Occurrence Trigger Claim Issues: Project Specific Exposures Subcontractor should name GC as an additional insured Pricing: Exposures Trades Performed PROFESSIONAL LIABILITY: 1 st & 3 rd Party Coverages Covers BI/PD Arising Out of the Failure to Deliver Upon Professional Obligations within a Contract: 1 st Party Insufficient limits for work subcontracted (design or other) 3 rd Party BI/PD resulting from clients professional negligence (failure to meet the standard of care) Typically Claims Made Trigger Coverage Issues: Upward trend in PL losses Standard of Care Pricing: Contractual Responsibilities, Holding of Subcontracts, Engineering Required 20 10

19 4/11/2013 OCP & RRP OWNER s PROTECTIVE: Policy is Purchased by GC in the Name of the Owner for Liability Arising Out of: Operations performed for the Owner by the GC for a specific project Owner s own acts or omissions in supervision of GC s work Why an Owner Wants an OCP: Separate pricing & limits for owner Primary insurance No cancellation w/o owner knowledge Coverage Issues: No completed operations coverage Not covered by GC s umbrella Pricing: Values, Payrolls, Location, Schedule RAILROAD PROTECTIVE: Policy is Purchased by GC in the Name of the Railroad for Liability Arising Out of GC s Operations Typically required for work within 50 feet of railroad Coverage Issues: GC often required to buy RRP as well as provide indemnification and additional insured status to railroad Pricing: Railroad volume (trains / hour) Work performed within 50 of track Type of railroad (passenger / freight) Subrogation Language 21 SDI & Financial Lines SUB DEFAULT INSURANCE: 1 st Party Coverage Covers Financial Loss as a Result of the Default of a Subcontractor Acts like a surety wrap up Covers all subs on a covered project Coverage Considerations: Large Deductibles Validity of Default GC required to evaluate subcontractors Claims Issues: Engagement of Subcontractor Principal & Surety in Claim Process Pricing: Ability of GC to select and manage subcontractors FINANCIAL LINES COVERAGE: Crime, D&O, Fiduciary & EPLI 1 st & 3 rd Party Coverages Purchased Separately or as a Package Coverage Aspects: Crime Losses as a result of theft or burglary. Often includes employees and computer fraud. D&O Covers liability of directors & officers in the performance of their duties in the leadership activities. Fiduciary covers liability of fiduciaries of company sponsored pension plans. EPLI Covers company for liability against employment related claims such as harassment or discrimination. Pricing: Relatively inexpensive coverage that provides significant balance sheet protection

20 4/11/2013 Thank You Joe Charczenko Partner April

21 CONSTRUCTION INSURANCE Larry Bartelemucci A. Types of Insurance: 1. CGL policies. 2. Wrap-ups: a. CCIP b. OCIP 3. Builders Risk. PITFALLS TO AVOID WHEN NEGOTIATING THE INSURANCE ASPECTS OF A CONSTRUCTION CONTRACT A. Key Contractual Provisions That Should Be In Every Contract (Owner-Builder, Builder- Subcontractor). When it comes to insurance coverage on a construction project, all parties typically share the goals of maximizing coverage and getting what the parties think they are paying for. What is good for the owner is typically good for the builder is typically good for the subcontractor. Certain issues should be addressed in every set of insurance specifications. 1. Additional Insureds: Parties higher up the project chain (owner-builder-sub) should be additional insureds on the policies of lower tiered participants. Such status gives the additional insured party the ability to make direct claims against the policy on which they are an additional insured, and, sometimes more importantly, entitles the additional insured to defense coverage. nydocs b. There are two basic ways to write additional insured coverage scheduled and blanket endorsements. (1) Scheduled (CG (ongoing), (completed ops), (ongoing)). Additional insured partied are listed or scheduled in the endorsement, so it eliminates the need to prove additional insured status. Preferred endorsement, as long as filled out properly (all names, accurately stated, corrrect location). (2) Blanket (CG (ongoing for whom you are performing operations ). Limited to situations where an underlying contract requires inclusion as an additional insured; requires proof. (3) Many forms (refer to example list provided in materials from Indianafarmers.com) that can be tailored to individual project. There are forms for owners who are renting, mortgagees, architects, etc. Find the right form or forms for your situation. 1

22 nydocs c. Contracting party should be specifically required to include higher tier project member as an additional insured. Absolutely necessary for blanket endorsements. May not be necessary if scheduled endorsements used, but is belt-and-suspenders in case wrong endorsement is used or scheduled endorsement filled out improperly. For example, I have seen many scheduled endorsements filled out to say parties required by contract, essentially improperly converting it to a blanket endorsement. 1. Primary and Non-Contributory: Contract should specifically require that the insurance provided by the contractor is primary and noncontributory. Multiple policies may cover the same occurrence, and so the priority of coverage must be determined. Most policies attempt to shift responsibility elsewhere by including a provision establishing that the policy is excess over other responding policies, unless the policy is required to be primary and non-contributory. If this clause is not present, an additional insured s own policy may be forced to respond and/or recovery may be delayed. 2. Insurance Ratings and State Admissions: We typically require certain minimum AM Best ratings indicating the insurance company s financial outlook and size. If a company is too small or is negatively trending, you may want to consider using a different company. Using only insurance companies that are admitted to do business in a given state may also have benefits to the policyholder. For example, using an admitted carrier in NY allows the policyholder access to the insurance fund in case of insurance company insolvency, avoids excess lines tax and stamping fee (3.8%), and ensures the use of regulated and approved forms. 3. Problem of Upside-Down Policies: Typical CGL policies are written comprehensively my term meaning that they cover all risks except those specifically excluded. We have encountered CGL policies [will search for forms] that have instead been written to exclude all risks other than those specifically designated as covered. As it is virtually impossible to account for all potential risks, the upside-down policy should be avoided. We attempt to avoid this problem by specifying that policies be comprehensive. 4. Project-Specificity Policy or Aggregate: Some policies are written to cover all or a set of the policyholder s property or projects. When this is the case, there is a risk that the aggregate limits will be eroded by occurrences on other projects/properties. Coverage is no good if there is nothing left by the time your claim is made. To avoid this issue, we typically require that there be a separate per-project aggregate limit or, although more expensive, a stand-alone project-specific policy. 5. Ongoing Operations Versus Completed Operations Coverage: Policies should have coverage for both. a) The general difference between these two types of coverages: 2

23 nydocs (1) Ongoing operations coverage covers occurrences for the contractor s activities while still performing work on the project site. (2) Completed operations covers occurrences arising out abandoned or completed operations, such as latent defects discovered after project completion. b) Duration of completed operations. Some policies or policy endorsements will limit the duration of completed operations coverage. Such duration should be no shorter than the applicable statute of limitation or repose. 6. Waivers of Subrogation: Good idea? Waivers of subrogation are agreements whereby a policyholder waives its insurance company s right to step into the policyholder s shoes and sue the potential wrongdoer to recover monies it pays out under a policy. Whom do they benefit? My general opinion is that the only parties that benefit from the absence of waivers of subrogation are insurance companies. a) The absence of such a waiver creates the following risks: 1. Delays to the project and potential contractor default if it becomes bogged down in litigation. 2. Conflict between project team members. 3. Additional time and expense. b) And why? So that the insurance company can recoup losses for risks that it happily collected premiums to accept. 7. Excess Coverage: Follow form or umbrella? Excess coverage can be tailored in two ways: a) Follow form follow form coverage generally covers whatever is covered in underlying policies (with some exclusions). If it is covered below, then the excess policy will follow form and cover the same risks. b) Umbrella umbrella coverage is generally written in the format of a stand-alone policy, covering its own set of risks. While sometimes this can result in coverage that is broader than the underlying coverage, it can also create risks that there are gaps in coverage. c) We typically like to specify follow form coverage for stand-alone projects where the risks are reasonably predictable, as long as the underlying coverage is sufficient and tailored to that project. But the policyholder should always review which option is best for that given project and which policy benefits it the most. 3

24 8. Builder s Risk Coverage The risks addressed by Builder s Risk coverage differ from CGL and other liability coverage. [Discuss with Joe here what builder s risk is and how it fits within the project s risk management structure] 9. Read the Policy! Insurance certificates are worthless it says so right [there]. They can also be inaccurate or, even worse, forged or fraudulent. There is no substitute for reading the policy. B. Troublesome Endorsements. Even the best tailored insurance specifications will be worthless if the policies themselves do not reflect those specifications or exclude risks that are inherent in the type of work being performed. This makes it imperative that both higher tiered project team members and the policyholders themselves work with their insurance advisors to vet the actual policies and endorsements. Potential minefields to be aware of include: 1. Project location. Some policies will be endorsed to limit the policy s coverage to specific locations identified in the policy. Such limitations need to be reviewed. a) War story Contractor s CGL policy for all projects was written like a property policy, and limited coverage to only home office. None of the work locations were covered. b) Also need to worry about a location being too specific, even if accurate. For example, a project location endorsement (such as CG 21 44) may inadvertently exclude work performed on adjoining property (i.e., underpinning, shoring, access work, protections). 2. Work Type. Policies need to be vetted to ensure that the no part of the work s scope is excluded. a. War story Prominent NYC demolition contractor produced a policy that explicitly excluded demolition work. Every project put their entire business and the property owner at risk. d. Remediation work asbestos, mold, hazardous materials etc. can all be, and often are, excluded. This is not a good thing if you are a remediation contractor or an owner contracting for remediation work. Additional insurance addressing these risks needs to be obtained. e. Underpinning, excavation, shoring (subsidence) War story: the first tendered policy specifically written to cover an underpinning project excluded coverage for losses related to underpinning. f. Do professional services include supervision? It depends on how the specific endorsement is written. For a construction manager, supervision is its primary function. nydocs

25 2. Work Force. Own labor or subcontractors? Some exclusions limit who can provide labor on the project. a. Elimination of coverage for subcontractor work to avoid the subcontractor exception to the your work exclusion (as discussed by David). Obviously bad for the policyholder. War story specified that work can only be done by subcontractors, and then excluded coverage for subcontractor work. b. Risk of coverage loss if the contractor s own labor performs work (scheduled U ). 3. Work Product, Means & Methods, and Specific Materials. Some endorsements will exclude losses arising ot of certain work product, means & methods, and materials. a. Silica Losses related to the use of silica are now frequently excluded (no sand-blasting, implication on fracking). b. Pex piping War story: This was the hot new plumbing product, and included in the client s design. Upon discovery of the exclusion, client had to decide whether it wanted to go back to market or change the design. It changed the design, but not after speaking with a shocked and understandably irate president from the PEX piping company. c. EIFS systems Same concern as PEX piping. d. Blasting/explosion Exclusions of blasting or the use of explosives can have implications on excavation work, particularly if unexpected subsurface conditions are encountered. e. Lead What if the contractor is building an MRI room? f. Chinese drywall 4. Subcontractor Insurance Requirements. Many policies will now be endorsed to specify that all or certain identified types of subcontractors maintain insurance with designated limits of coverage. For example, in the NYC market, most insurance companies are requiring high limits from crane operators. This creates several concerns: a. What is the policyholder s duty? Some endorsements require that the policyholder merely require that the subcontractor maintain coverage and collect insurance certificates, while other require that the policyholder ensure such coverage is obtained and maintained. The latter is a very high standard and would require substantial effort. b. What are the potential ramifications? Depending on how the endorsement is written, failure to comply can result in an increased deductible or, far worse, forfeiture of coverage. nydocs

26 c. There is also a practical risk that subs can t obtain coverage and may need to be replaced. But what if no viable replacements? 5. Cross-Suit Exclusions. A cross-suit exclusion excludes from coverage certain claims brought by certain insured parties. Cross-suit exclusions can be written in two ways: a. Named Insured versus Named Insured (i.e., U ): This excludes coverage for claims by Named Insureds against other Named Insureds. This makes sense, as coverage is intended for third-party claims. b. Additional Insured versus Named Insured (i.e., XLI-0380): This would exclude coverage for claims brought by an Additional Insured (like the property owner) against a Named Insured (like the contractor). As this would basically defeat the entire purpose of coverage, it should be immediately rejected. Summary All of these potential pitfalls are worrisome, but the good news is that with proper insurance specifications and by working with your insurance advisors to vet the project s insurance. nydocs

27 CONSTRUCTION CLAIMS CHECKLIST Joshua Gold, Esq., Anderson Kill & Olick, P.C. 1. Give Notice in writing to all potentially applicable insurance policies GL E&O A.I. Umbrella Excess Other Policies (e.g., builder s risk, OCIP, etc.) 2. Cooperate in defense of underlying claim, but Mind the Privilege 3. If Duty to Reimburse vs. Duty to Defend, Send Invoices Regularly To All Insurance Companies But Again, Mind the Privilege 4. Settlements Negotiations: Keep Insurance Company in the Loop 5. Settlement Opportunities: See Written Consent from Insurance Company 6. Subrogation: Keep An Eye On The Insurance Companies Subrogation Rights And Expressly Address Subrogation In All Settlement Releases Including Those Set Forth In Global Settlements 7. Reduce to writing all Material Claim Issues and Developments 8. Enlist the insurance brokers help when dealing with insurance claims nydocs

28 The following bulletin, provided by IACC member Anderson Kill & Olick, P.C., is provided for informational purposes only. The IACC does not assume responsibility for the information contained in this communication. Minimize Risk in Renovation Projects By Lawrence Bartelemucci A renovation project, whether it be a storefront on Madison Avenue or back-office in the suburbs, must be properly planned and coordinated in order to achieve the owner s goals. An inefficient renovation project risks losses, not just from increased construction costs, but also lost revenue if a store cannot timely open. Likewise, if a business needs to rent alternate space during the renovation, a delayed project will result in increased rental costs. Four basic steps can help minimize the risk that projects will go over budget or beyond the scheduled construction period: give clear design guidance, hire the contractor, plan the work sequence, finish the project. Step 1: Give Clear Design Guidance A successful renovation project must have a clear scope of work. All other aspects of the project depend on this scope description. If an owner is hiring an architect or engineer to design the project, the engagement agreement must clearly define the design professional s scope of services. The design professional must not make an early exit as the owner s eyes and ears on a project, he must remain involved until the project is completed. The design professional must aid the owner in closing out the project and obtaining any required governmental approvals. Step 2: Hire the Contractor Once the project s scope is determined, the owner must next engage the party responsible for developing and executing the project plan the contractor. When hiring a contractor, it is important that the agreement specifically describe the contractor s scope of work. The agreement must also, among other things, ensure that (1) the contractor has the proper insurance, (2) risk is properly allocated through indemnification clauses and other contract provisions, and (3) the contract price is structured so that there is enough money left at the end of the project to complete all remaining work. Clearly delineated risk and responsibility allow the renovation work to start off as a team effort, where the parties do not treat each other as adversaries. Step 3: Plan the Work Sequence Sequencing renovation work in a manner that minimizes disruption to portions of the building still in use is essential to a successful project. Each of the parties must understand its role in this process and how its work fits within the project plan. Contract documents must clearly set out how the project team foresees the phasing, starts and stops, and other timing considerations arising during renovation. Lack of coordination creates stoppages in the work and increased costs. Step 4: Finish the Project Closing out a project will require a coordinated effort from all of the parties: the architect for approvals and sign-offs, the contractor to complete or correct remaining work, and the owner to accept the project and complete payment. But the contract must specifically require all characters to remain involved in the process until that time. The typical form construction contract used for renovation projects is inadequate to address the complex issues involved. Instead, owners should craft their own specific agreements containing the sufficient detail, role definition, and incentives/disincentives that promote timely and coordinated performance.

29 About the Author Lawrence Bartelemucci is a shareholder in the New York office of Anderson Kill & Olick, P.C. Mr. Bartelemucci s practice concentrates in the area of construction law, where he has drafted and negotiated numerous manuscripts and AIA form owner-builder, construction management, architect, design-build, and development agreements. For more information, please contact Lawrence J. Bartelemucci at (212) or lbartelemucci@andersonkill.com. About Anderson Kill & Olick, P.C. Anderson Kill practices law in the areas of Insurance Recovery, Anti-Counterfeiting, Antitrust, Bankruptcy, Commercial Litigation, Corporate & Securities, Employment & Labor Law, Health Reform, Intellectual Property, International Arbitration, Real Estate & Construction, Tax, and Trusts & Estates. Best-known for its work in insurance recovery, the firm represents policyholders only in insurance coverage disputes, with no ties to insurance companies and no conflicts of interest. Clients include Fortune 1000 companies, small and medium-sized businesses, governmental entities, and nonprofits as well as personal estates. Based in New York City, the firm also has offices in Newark, NJ, Philadelphia, PA, Stamford, CT, Ventura, CA and Washington, DC. For companies seeking to do business internationally, Anderson Kill, through its membership in Interleges, a consortium of similar law firms in some 20 countries, assures the same high quality of service throughout the world that it provides itself here in the United States. The information appearing in this article does not constitute legal advice or opinion. Such advice and opinion are provided by the firm only upon engagement with respect to specific factual situations. 2

30 Fine Print Online Property Insurance and Disaster Recovery After Sandy by Joshua Gold and Lawrence Bartelemucci As the devastation wrought by Superstorm Sandy brought home, natural disasters can imperil even the most rock-solid businesses and the survival of a business often hinges on how quickly and completely it is able to recover from such a catastrophe. Since no region of the world is immune, assembling a team to implement a disaster recovery plan is invaluable to any business. While generally no single disaster recovery approach will be right for every business, individual or governmental unit, below are some insurance and property considerations to help ensure prompt action and increase the likelihood of a quick recovery once disaster occurs. Insurance Concerns The vast majority of businesses purchase commercial property insurance. Depending upon the type of coverage bought, this insurance can cover storm-related loss or damage to insured property, time element losses, research and development, public relations costs, claim adjustment expenses, loss mitigation efforts and many other items. To both preserve and maximize this coverage, develop a checklist of certain action items to address with your property insurance companies (including your excess insurance companies) after a loss occurs: Notice: Provide timely notices of claim to all insurance companies. Proofs of loss: Schedule and meet deadlines to file proofs or statements of loss. If the proof of loss deadline appears unrealistic given the scale of the damage, be proactive and get extensions (in writing) in advance of the looming deadline. If there is not enough time to do so, file a partial proof of loss reserving the right to amend/ supplement the proof. Sub-limits: Analyze your insurance coverage to determine what coverages are triggered and whether you are subject to any sub-limits (insurance policies are not always clear on the issues of sub-limits, concurrent losses and overlapping coverage). Suit limitation: If your policy contains a suit limitation clause (and almost all do), this date must be conservatively calendared, no matter how friendly your local underwriter seems to be while handling your claim in the early stages. Election of valuation method: Check your insurance policy to see if there is any deadline on the date by which the insurance policy seeks to have you elect the valuation method for the loss claimed. Time requirements to rebuild or replace: Similar to the point above, see if there is a deadline by which policy seeks to have the rebuilding or replacement of the affected property completed. Preservation of evidence: Sort out in writing how evidence is to be preserved if destructive testing or immediate remedial work needs to be undertaken. Note also that many policies provide coverage for debris removal. Loss mitigation: Address in writing the loss mitigation steps you intend to take. If there is no time to do this in advance, then address it in writing soon thereafter, memorializing the urgent conditions that required you to act immediately. Demands for partial payments: Some policies have express provisions requiring the insurance company to make partial payments or claim advances. Invoke these clauses so that cash flow issues are ameliorated. Some insurance companies will also provide cash advances if simply requested. Property Considerations The plan for getting your loss adjusted and paid should also consider (both before a loss and most certainly after) issues that are specific to your property needs: Is your space worth rehabilitating? If it is, then your company will need to contract for design and construction services to rehabilitate the current space or rebuild on site. If the space that will be rehabilitated is leased, your company needs to coordinate its efforts with the landlord. If it is not worth rehabilitating, then your company must consider how it will dispose of the space (for example, selling the property or cancelling the lease), and how it will acquire new permanent space. In addition, your company will need to contract for design and construction services for its new space. This process should involve a zoning analysis to ensure that your company can build what it needs and conduct its operations at the new location. If you do choose to relocate, FEMA s Hazard Mitigation Grant Program (HMGP) may prove to be a valuable resource. The HMGP marshals a mix of federal and other funds to buy the damaged property, demolish

31 Fine Print Online it and return the land to its natural state. The property owner (business or individual) must apply through its municipality, which buys the property and applies for federal funds. To qualify, the property must be located in a flood plain, and the cost to repair or replace must exceed 50% of fair market value. How will you operate on a current basis? Whether or not your company relocates, it will likely need to lease temporary space to resume current operations. It may also need to rent space to store saved or salvageable equipment and inventory. Do your telecommunications leasing and services require changes? Both existing and any new contracts should be tailored to your operations and the realities of the space within which you will conduct business. In addition, current agreements should be reviewed for applicable termination or transfer provisions, as well as potential cancellation penalties. Will the recovery require financing? The recovery may require financing be it an acquisition loan, line of credit to continue operations, advance of insurance proceeds or construction loan to fund the rehabilitation or new construction. The different means available for acquiring such financing should be considered. Will you need special consideration from existing creditors? If so, it may be vital to reach out proactively, perhaps with the help of a restructuring professional, who can calculate projected revenue and cash flow, map out obligations to creditors, and begin negotiations, taking into account the likely time needed to restore the business to pre-disaster strength, the sums reasonably expected from insurance recovery and other variables. What are the tax consequences? Depending upon what a business plans or ends up opting to do after a loss, tax consequences may arise. A tax analysis should factor into the ultimate decisions made about repairing/ replacing the damaged property, or even abandoning the property and opting for a new property for conducting business. Attention should be paid to your property insurance as it may specifically address tax treatment and provide certain options and benefits depending upon the circumstances. While no one can work out every detail of a disaster plan before disaster strikes, preparing checklists in advance, and taking steps such as scouting out viable temporary space, can greatly smooth the path to recovery and maximization of insurance claims. Joshua Gold is a shareholder in the New York office of Anderson Kill & Olick, P.C. and regularly represents policyholders in insurance coverage matters and disputes concerning arbitration, time element insurance, electronic data and other property insurance coverage issues. Lawrence Bartelemucci is a shareholder in the New York office of the law firm of Anderson Kill & Olick, P.C. His practice concentrates in the area of construction law, where he has drafted and negotiated numerous manuscript and AIA form owner-builder, construction management, architect, design-build and development agreements. Reprinted with permission from Risk Management. Copyright 2012 Risk and Insurance Management Society, Inc. All Rights Reserved.

32 Fine Print Online Understanding Time Sensitive Provisions by Joshua Gold When reading the fine print of almost any insurance policy, one will see a host of often daunting insurance policy conditions. Almost all insurance policies, including liability, crime, kidnap and ransom, and property insurance policies call for notice of claims within a certain period of time. Additionally, many insurance policies, such as property or crime policies, call for the filing of a proof of loss within a set amount of time and also may require that any suit against the insurance company for its failure to pay a claim (in part or in full) must begin within a reduced statute of limitations period-sometimes as short as 12 months. Such a provision may even be found in a liability policy, although this is rare. Policyholders should be careful with these timesensitive provisions as insurance companies often seek a complete forfeiture of insurance coverage when arguing that the policyholder failed to comply with them--even where no harm to the insurance company has resulted. Notice Provisions Failure of a policyholder to provide timely notice of a claim can result in a protracted legal battle over the consequences of the alleged late notice. While the great majority of states require an insurance company to demonstrate actual prejudice as a result of the late notice before escaping coverage, a small minority of states holds that late notice can result in complete forfeiture of insurance coverage without a demonstration of prejudice to the insurance company. Although there are a host of exceptions to finding a forfeiture of coverage, policyholders should still err on the side of caution when faced with notice of claims and should provide notice to all insurance companies as soon as possible. It is also wise for policyholders to obtain preferred language for their notice clauses, which can often be accomplished with the help of a good insurance broker. Some insurance policies also contain clauses that specify when and how a policyholder is to give notice of circumstances that may result in a claim. It is important to check these provisions to see if they are discretionary or mandatory. Even if not mandatory, it is prudent to evaluate whether notice should be provided anyway in conjunction with considerations about disclosure under a renewal insurance application, changing insurance companies or other risk management objectives. Policyholders should also check notice terms that may be found in umbrella and excess insurance policies to see if they differ from the requirements imposed by the primary insurance policy. Just because an excess insurance policy is called a follow form policy does not mean it actually is. Proof of Loss Provisions Almost every property insurance policy contains a clause calling for the policyholder to submit a proof of loss to the insurance company in connection with a property claim. This is often true of crime policies and fidelity bonds as well. Most, but not all, property insurance policies call for a proof of loss to be filed within a certain period of time, such as 60, 90 or 120 days from the property loss or damage. Anyone who has ever been involved in quantifying the loss from a serious claim will know the time period afforded by the policy for the proof of loss is often unrealistic. As with late notice, failure to abide by the terms of the proof of loss may lead to an insurance company seeking a complete forfeiture of insurance coverage. Many courts have held that an insurance company cannot deny insurance coverage for lack of a proof of loss where the insurance company does not send the policyholder a form of proof of loss for completion. Even so, the better practice is to negotiate a Time extension with the insurance company and preserve that agreement in writing before time expires to file a proof of loss. This proactive method of handling the filing of a proof of loss is far preferable to battling it out in court. Suit Limitation Provisions Additionally, policyholders must also keep in mind suit limitation provisions, which will be used by some insurance companies in an attempt to escape their coverage obligations for even the most clearly covered claim. Under many property insurance policies, the insurance company seeks to shorten the applicable statute of limitations by, for example, providing in the policy that any suit for the recovery of any loss hereunder shall not be brought...after the expiration of 24 months from the discovery of such loss. These suit limitation provisions can prove to be a snare for the unsuspecting, even where the otherwise applicable statute of limitations would provide a much longer period in which to file suit for certain causes of action, such as breach of contract.

33 In some states, insurance company efforts to shorten the statute of limitations are strictly prohibited or restricted. Court decisions in other states have found numerous exceptions to applying a suit limitation as a means of avoiding insurance coverage. Nevertheless, the safer practice is to mark the date in which a policyholder should be able to start an insurance coverage action should the insurance company refuse to honor coverage. While no one enjoys dealing with the fine print of insurance policies, it is worth the effort to be proactive so as to leave as few technical arguments at the insurance company s disposal when you need your insurance protection the most. n Joshua Gold is a shareholder in the New York office of Anderson Kill & Olick, P.C. and regularly represents policyholders in insurance coverage matters and disputes concerning regulation, time element insurance, insurance captives, electronic data and other property insurance coverage issues. Reprinted with permission from Risk Management. Copyright 2011 Risk and Insurance Management Society, Inc. All Rights Reserved.

34 By: Joshua Gold Joshua Gold Risk management for hotels and resorts has never been easy. The perils are abundant; challenges range from protecting against employment related claims to ensuring the general safety of guests to protecting against Caribbean hurricane risk. Hotel operators and owners can do much to mitigate risk by considering factors other than price when purchasing their insurance coverage. Below is a check-list of measures that can give policyholders an advantage when dealing with potentially major loss scenarios. 1. Purchase Tailored Insurance Coverage Policyholders should seek to buy insurance coverage tailored to protect against risks unique to their business. For example, so-called all-risk manuscript property insurance policies that protect against risks to hotels and resorts. Often included within this manuscript coverage is time element coverage, which replaces business income when operations are interrupted. Time element coverage can protect against losses stemming from interruptions to operations due to the loss of a liquor license, infectious or contagious disease, food or drink poisoning, vermin or pests. Other provisions may cover lost income due to murder, suicide or rape on premises, or losses occasioned from the evacuation of the casino or hotel after the report or detection of an explosive device. Insurance coverage may also be available to cover costs of relocation of guests during a business interruption. Some manuscript policies also protect against loss of business income due to damage away from the premises at sites upon which the policyholder is reliant, such as conference centers, sports complexes, convention centers, and amusement parks. 2. Avoid Onerous Insurance Policy Terms While shopping for the provisions outlined above, seekout policies containing the fewest escape clauses that might enable the insurance company to avoid coverage for a large claim. What the big print gives, the fine print can undermine. For example, Industry News The Special Perils of Insurance Coverage policyholders should insist upon policies that do not tie the calculation of time element coverage to the performance of other properties owned by the policyholder. Some insurance companies insert language that they argue entitles them to offset losses at one location with profits earned at another. Policyholders should also insist upon policies that do not require a complete cessation of business to trigger time element coverage. Some insurance companies have argued that there is no time element coverage unless the policyholder s business has completely ceased. This can be a devastating position when a policyholder operates numerous business activities at a location and an insured peril only affects some of them. Even a partial interruption of activities can have dire consequences for the hotel s profitability. Avoiding such policy traps is worth both time and money; policyholders are wise to shop for the most favorable terms available. Shopping by price alone is usually a mistake. 3. Avoid Incongruities In your Insurance Program Many hotel and resort operators have to fill out large insurance programs with scores of different insurance companies because of the numerous and sometimes significant locationspecific risks posed by some of their properties (Caribbean, California, cities at high risk for terrorism, etc.). While it can be painstaking, policyholders should take care to ensure that their excess policies track the language of their primary policies to avoid gaps in coverage and other potentially unpleasant surprises. Just because an excess insurance policy is described in the insurance binder or declarations page as follow form does not mean that it really is. Conclusion Policyholders need to be smart shoppers, using their brokers and underwriting meetings not only to find the best premium quotes, but also to find the best terms of coverage. Joshua Gold is a partner in the New York offi ce of Anderson Kill & Olick, P.C. Mr. Gold represents and counsels a number of gaming and hospitality clients with regard to insurance coverage matters, risk management issues, disputes, lawsuits, captive insurance companies and international arbitrations.

35 Fine Print Online Accessing Your Excess Insurance by Joshua Gold Over the last several years, excess level insurance companies have increasingly disputed and denied insurance coverage to their policyholders when the policyholder settles for less than full policy limits with one of its underlying insurance companies, including the primary level insurance company. While this tactic often fails to work a forfeiture of excess insurance coverage, it does present yet another insurance coverage headache that risk managers must confront. What had been a settled legal point for many decades and a consistent way of doing insurance business (i.e., that insurance claim settlements were desirable and would not lead to a forfeiture of excess coverage) has been turned on its head in recent years. A potent reminder of this came several weeks ago when a federal appeals court held that a bank could not access some of its excess level insurance coverage after it settled with two underlying layers of insurance coverage for less than the full policy limits. As such, before agreeing to accept less than full policy limits from an underlying insurance company in order to settle a claim, the policyholder must consider what the language of the excess policy (or policies) says about exhaustion and trigger, as well as the law governing the construction of the insurance policies. Keep in mind that this will not always be clear to policyholders given the convoluted language in some excess insurance policies and uncertainty over what law will apply. The Typical Scenario The usual scenario in which the exhaustion challenge by the excess insurance company arises is where the policyholder settles an insurance claim with an underlying insurance company (often the primary layer of insurance coverage) for less than 100 cents on the dollar. The policyholder then bridges the gap between the amount recovered from the underlying insurance company and the attachment point of the next level insurance company and seeks its excess coverage. The excess insurance company in turn denies insurance coverage by arguing that since the underlying insurance company did not pay the full policy limits, excess coverage is forever forfeited for the claim. This argument is made even where the policyholder eats the difference between the unpaid portion of the underlying insurance and the next excess policy attachment point. Thus, the denial comes even when the excess insurance company is not being asked to drop down or incur a financial obligation that it never bargained for. The Legal Environment Almost a century ago, a federal appeals court decided in Zeig v. Massachusetts Bonding and Insurance Co. that an excess insurance policy was triggered because a settlement with an underlying insurance company for less than full policy limits effectively exhausted that policy. According to the rule of Zeig, the payment of underlying policy limits could be satisfied through a settlement. The court also noted the very strong public policy favoring settlements. As a result, courts across the country followed the rule of Zeig for decades. Over the past decade, however, several excess insurance companies appear to have drafted their excess policies to circumvent the Zeig holding. Based upon some of the new language found in excess polices, the trigger of excess coverage is tied to a cash payment of policy limits by the underlying insurance company. Some recent cases in 2007, 2008 and now 2011, however, have refused to apply the rationale of Zeig and have held that the policyholder s receipt of less than full underlying insurance policy limits forever impairs the ability to obtain excess insurance coverage-even where the policyholder absorbs the difference between the amount received and the excess insurance attachment point. Do Not Leave Anything to Chance While there are many courts that will still follow the rule and rationale of Zeig, policyholders are better off not leaving anything to chance. There are excess insurance policy forms that are not drafted in a manner to circumvent the Zeig holding. Excess policy forms that seek to prejudice policyholders for entering into compromise settlements with their underlying insurance companies should be avoided. Also, even those excess insurance companies that employ language designed to avoid coverage when the

36 Fine Print Online policyholder receives less than full policy limits will often agree to endorse their policies to add favorable terms that provide coverage (even for those instances where the policyholder settles with an underlying insurance company for less than full policy limits or where one of the underlying insurance companies cannot pay in whole or in part due to insolvency). Review the Terms Many insurance brokers are now aware of this issue and will be able to guide policyholders toward more favorable terms to avoid any exhaustion disputes from excess level insurance companies. It is well worth the effort to be vigilant with excess insurance policy language up and down all the lines of insurance cover- age that the policyholder purchases. Despite the use of follow form titles to describe excess insurance coverage, excess policies routinely possess unique terms and conditions. Regrettably, some of these terms are traps. Therefore, with each new policy year, insurance policies must be reviewed to make sure coverage is not compromised when needed most.n Joshua Gold is a shareholder in the New York office of the law firm of Anderson Kill & Olick, P.C. He regularly represents policyholders, including gaming and hospitality businesses, software companies and retailers in insurance coverage matters and disputes concerning liability, arbitration, time element insurance, electronic data and other property/ casualty insurance coverage issues. Reprinted with permission from Risk Management. Copyright 2011 Risk and Insurance Management Society, Inc. All Rights Reserved.

37 Faculty Biographies

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39 Lawrence J. Bartelemucci Shareholder New York T F Practice Areas Real Estate and Construction Corporate and Commercial Litigation Insurance Recovery Mr. Bartelemucci is the chair of the Real Estate and Construction Practice Group. He practices in the area of construction law, where he has drafted and negotiated numerous manuscript and AIA form owner-builder, construction management, architect, design-build, and development agreements. He has worked on several major development projects involving the leasing of air rights for construction, and has extensive experience representing hospitals and other institutional clients with their own construction needs. Mr. Bartelemucci is also a member of Anderson Kill's Financial Services Industry Group and its Hospitality Industry Practice Group. Mr. Bartelemucci's transactional construction experience also enables him to provide informed and practical counsel when handling construction-related disputes. He has represented clients in both arbitration and litigation forums on a variety of construction-related disputes, including those involving building collapse, fire loss, construction encroaching on adjacent properties, defective construction, non-payment, change order disputes and mechanic's liens. Mr. Bartelemucci has substantial experience prosecuting owner's claims under payment and performance surety bonds, including the defense of subrogation claims made by such sureties. Mr. Bartelemucci also has extensive experience drafting and negotiating site-licensing agreements between real estate owners and telecommunications companies. He also has substantial experience in telecommunications disputes and has represented an institutional client in an action related to overbilling for telecommunications services. Mr. Bartelemucci's real estate experience includes both transactional and litigation projects. He has represented both property owners and third parties in disputes over interests in real property, and has participated in real property sales, as well as a significant "lollipop" condominium conversion. Lawrence J. Bartelemucci joined Anderson Kill's New York office in January Prior to joining Anderson Kill, Mr. Bartelemucci was an associate with the law firm of DeForest & Duer. While attending St. John's University School of Law, he was a member of the American Bankruptcy Institute Law Review, where he served as the Executive Articles Editor. Publications "Property Insurance and Disaster Recovery After Sandy," Risk Management magazine (December 2012) (with Joshua Gold) Page 1 of 3

40 "Property Insurance and Disaster Recovery," Risk Management magazine (March 2012) (with Joshua Gold) "You've Decided to Build Green. Now What?," Focus (Industry News), published by the New York State Hospitality & Tourism Association (Summer 2011) "Telecommunication Upgrades: Beware of the Potential Pitfalls," Focus (Industry News), published by the New York State Hospitality & Tourism Association (January 2011) "Minimize Risk in Renovation Projects," Italy-America Chamber of Commerce, Inc. (July 2010) "Upgrading Telecommunications Services: Think space, flexibility and service," Focus (Industry News), published by the New York State Hospitality & Tourism Association (January/February 2009) "Do Not Leave the Meter Running During Renovation Projects; Finishing Specific Projects Will Save Properties Both Time and Money," Focus (Industry News), published by the New York State Hospitality & Tourism Association (May 2008) "AIA Form Agreements: Are They Fair to Owners?," AKO Real Estate & Construction Advisor (Spring 2006) "Leveraging Air Rights to Finance Construction," Real Estate Finance (February 2005) (with James P. Cullen) and AKO Real Estate & Construction Advisor (Autumn 2004) (with James P. Cullen) "A Smart Approach to Developing 'Smart Buildings,'" AKO Real Estate & Construction Advisor (Spring 2003) Speaking Engagements Crisis Management in the Midst of an Environmental Disaster, Pace University School of Law, Center for Continuing Legal Education Roundtable, White Plains, NY (February 22, 2013) "The Development Process: Feasibility, Contracting, Funding, the Construction Process, Including Insurance," 11th Annual 2013 Hospitality Law Conference, Houston, TX (February 11, 2013) "Environmental Issues in Real Estate Development and Leasing," Anderson Kill & Olick Seminar, New York, NY (January 24, 2013) (with Robert S. Cook, Jr., Thomas A. Neufeld and Thomas R. Petty) "How is the Surety Market Responding to Unique Risks of P3 Projects?," Business Insurance Webinar (November 1, 2012) "Real Estate & Construction, Industry Breakout Sessions: Important Issues Affecting Key Industries, 16th Annual Policyholder Advisor Conference, New York, NY (October 25, 2012) (with David E. Wood) "Hydraulic Fracturing for Oil Extraction: Things Property Owners Should Consider Before Leasing," RIMS Great Lakes Regional Conference, Cleveland, OH (September 12-13, 2012) (with John G. Nevius) "Construction Audit: Adding Value," New York and New Jersey Chapter of the National Association of Construction Auditors' Open House, New York, NY (August 22, 2012) (with Finley T. Harckham) Page 2 of 3

41 "Risks & Rewards in Real Estate," Seminar Series with Marcum LLP, New York, NY (March 3, 2011) (with Kevin J. Connolly and Finley T. Harckham) Press Mr. Bartelemucci is quoted or cited in the press. The following is a representative sampling: "Panelists ID development checklist," HotelNewsNow.com (February 26, 2013) "New York City sues Verizon for too-big building," New York Daily News (January 7, 2010) Bar Admissions New York and the United States District Court for the Southern, Eastern, Western and Northern Districts of New York. Professional Memberships New York City Bar Association, Committee on Construction Law; New York County Lawyer's Association; and New York State Bar Association Association Memberships New York State Hospitality & Tourism Association (NYSHTA); Catholics in Construction Education St. John's University School of Law, J.D. Manhattan College, magna cum laude, B.A. Copyright Anderson Kill & Olick, P.C. Attorney Advertising Client's Rights Legal Disclaimer Prior results do not guarantee a similar outcome. Page 3 of 3

42 Joe Charczenko, Partner (o) (c) Joe joined Construction Risk Partners in May of 2010 as a Partner and is responsible for managing the company s New York office. In Joe s tenure at CRP, he has been focused on leading the company s formal expansion into New York, quickly building an office, developing a strong team of surety and risk management professionals, and cultivating a strong stable of clients and strategic partners to expand Construction Risk Partners influence in the New York construction market. Joe continues to use his experience in understanding construction risk, strategic networking and developing teams to position Construction Risk Partners as a market leader serving the construction community. Prior to joining Construction Risk Partners, Joe was an Assistant Vice President and Northeast Regional Construction Manager for Zurich. He was responsible for overseeing the region's $350M+ construction book of business. In this role, Joe helped design some of the most creative and complex insurance solutions for his clients, including wrap ups, captive programs, Subguard, collateral and other unique programs. His responsibilities included the management of customer and broker relationships, new business growth, underwriting quality, operational improvement, and talent development. Joe joined Zurich in 2001 as a Construction Risk Engineer. After three years working with clients and brokers to improve and manage risk in loss control, Joe joined the Construction underwriting operation in a variety of roles including Customer Service Director and Casualty Underwriting Manager. Prior to joining Zurich, Joe worked for Peter Kiewit Construction Company on the Boston Central Artery Project ("Big Dig") as an Estimator, Project Engineer and Superintendent. The experience gained working with a large contractor on large projects has been invaluable to Joe as his career has evolved. Joe received his Bachelor of Science Degree in Civil Engineering (Structural Design and Construction Project Management) from Worcester Polytechnic Institute in Worcester, MA.

43 Joshua Gold Shareholder New York T F Practice Areas Insurance Recovery International Business Department Corporate Litigation Captive Insurance Joshua Gold is a shareholder in Anderson Kill's New York office. He has represented numerous corporate and non-profit policyholders in various industries, with recoveries for his clients well in excess of $1 billion. Mr. Gold is co-chair of Anderson Kill's Financial Services Industry Group and a member of the firm's Hospitality Industry Group. Mr. Gold's practice involves matters ranging from international arbitration, data security, directors' and officers' insurance, business income/property insurance, commercial crime insurance, and insurance captives. He has been lead trial counsel in multi-party bench and jury trials, and has negotiated and crafted scores of settlement agreements including coveragein-place agreements. Mr. Gold won a $7 million recovery in a landmark U.S. Court of Appeals, Sixth Circuit decision, on behalf of a retailer that suffered a data breach as a result of a computer hacking scheme. In finding coverage for the retailer's losses stemming from the breach, the Sixth Circuit rejected the insurance company's "direct loss" defense, instead applying a proximate cause standard. Because the "direct loss" defense is commonly cited in such cases, the decision is of particular importance to businesses purchasing fidelity, crime and financial institution bond coverage. Mr. Gold has a regular column in Risk Management Magazine and has been published in numerous business and legal periodicals, covering a variety of insurance, commercial and consumer issues. He has been quoted on insurance coverage issues in Forbes magazine, CFO magazine, Business Insurance, National Underwriter, Computerworld, Best s Insurance News and various other trade and business periodicals catering to the risk management, computer, medical and technology professions. Additionally, Mr. Gold is a frequent lecturer on insurance coverage issues, speaking at conferences nationwide and internationally, including conferences convened by the Risk and Insurance Management Society (RIMS), the Practicing Law Institute (PLI), the Chartered Property Casualty Underwriters Society (CPCU) and the College of Insurance, New York City. Mr. Gold is a regular contributor to Anderson Kill's Financial Insurance Law blog. Page 1 of 8