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On the morning of Feb. 5, 2016, a man walking down a street in Lower Manhattan was killed when a construction crane collapsed on top of him.
Three other people were also injured in the accident and New York Mayor Bill de Blasio quickly announced a plan to increase safety when large cranes are operating that includes doubling the fines for failure to safeguard equipment and increasing enforcement of sidewalk and street closures.
“Throughout the country, the construction industry is extremely active and is anticipated to remain active in the coming months,” said George Cesarini, New York-based senior vice president, construction risk engineering, for Chubb Ltd. “With the construction boom comes the need for more cranes to build these projects. With more cranes active on construction sites, the potential for crane and rigging-related accidents also increases, which reinforces the importance of proper planning and engineering of crane-related activities.”
Seattle, Chicago and Los Angeles are the top three cities with the most cranes in operation in the United States at the beginning the year, according to the 2017 Rider Levett Bucknall Crane Index.
Jake Morin, niche president of construction for ProSight Specialty Insurance in Morristown, New Jersey, said apartments and condos are being built faster than single-family housing as millennials flock to metropolitan areas.
“Over the past few years, the industry has been proactively preparing for a new set of guidelines from (the U.S. Occupational Safety and Health Administration),” Mr. Morin said in an email. “They have been expected for more than two years and this has caused crane companies to rethink their risk management and workflow to try and ensure that the new guidelines won’t bring their operations to a halt.”
Despite the Trump administration’s deregulation push, OSHA is still pursuing a rulemaking that will identify criteria for employers to follow to ensure their crane operators are completely qualified to operate cranes safely on construction work sites.
Mr. Morin said high-profile incidents like the crane that collapsed in Manhattan have spurred cities to put their own regulations on crane work — specifically, who can be contracted to operate the machines. Metropolitan areas don’t want their cities to be deemed unsafe because that will make them less alluring to technology companies and the young professionals they attract, he added.
“Business owners should make sure their insurance carrier offers a customizable range of coverage to protect assets and keep their businesses profitable,” Mr. Morin said. “Properly insuring projects will help businesses recover costs. For example, loss-of-use coverage helps compensate a building owner if a crane mishap delays the building from opening by the scheduled date.”
“Of the list of things that could turn into a catastrophe on a construction site, crane incidents are at the top of that list,” Ray Master, New York-based director of loss prevention safety consulting services at Construction Risk Partners, a JLT Group Co., said in an email.
Mr. Master noted that construction cranes are becoming more sophisticated and complex and they are dependent on — and often vulnerable to — human performance limitations. In addition, the cranes are often operated in dense urban locations and must contend with such challenges as the weather and the stability of the ground, he said.
Eighty percent of all crane upsets and structural failures can be attributed to exceeding the crane’s operational capacity, Mr. Master said. Falling as a result of improper or faulty rigging equipment and practices is another concern. In addition, 50% of crane incidents involve the crane coming in contact with electrical power lines, he said.
Joe Charczenko, a partner at Construction Risk Partners based in New York said crane exposures, like all construction exposures, require the basic insurances of workers compensation, general liability, auto liability, umbrella, environmental liability and professional liability.
“On projects with large cranes, the amount of umbrella limits is something that should be thoughtfully calculated,” he said in an email. “Proximity to traditional third-party exposures (adjacent building, public exposure, etc.) is the major consideration, but there are many factors that will influence how much limit you buy.”
Mr. Charczenko also said properly insuring the property exposures of cranes is critical. Most equipment floaters require equipment over $1 million to be scheduled to the policy and provide very little to no soft coverage if a crane is to fail. Builder’s risk policies often do not cover the crane exposure unless there is physical damage to the project, he said.
“Regarding cranes, construction companies should consider builder's risk cover for the crane itself as well as riggers liability for the exposure associated with moving property or equipment that belongs to others,” said Steve Buonpane, New York-based senior vice president, construction underwriting, at Chubb. “The standard construction general liability policy would exclude this under ‘care, custody and control’ provision, which is why a riggers liability cover — typically on the builder’s risk form — is needed.”
An Arkansas utility contractor has been cited and is facing $46,200 in proposed penalties from federal health and safety regulators after a crane failure killed an employee in March.