Monday, August 6, 2007

Insurance & the Minneapolis Bridge Collapse

The tragedy of the collapse of the bridge in Minneapolis raises interesting questions about liability and insurance issues. While investigators are still sifting through the facts of what happened and why, the collapse is a reminder of how different types of insurance work.

Professional Liability insurance is what covers designers (engineers and architects primarily) for their negligent errors and omissions in designing a structure or building. It appears that since the bridge was designed and built a number of years ago, the professional liability insurance may not still be applicable, even if it is ultimately proven to have been a design flaw. Perhaps the collapse was related more to lack of maintenance of the structure.

Builder's Risk insurance covers newly added construction work to a project in the event of damage while under construction. The classic case would be that Builder's Risk insurance would cover a fire at a new building under construction. Since it appears that the bridge was only being repaired, Builder's Risk insurance may not have even been required, nor would it necessarily cover such a collapse.

General Liability insurance covers damage to property and bodily injury as a result of an accident on the project. Presumably, the contractor on the bridge project had General Liability insurance which would help cover some of the losses in this case.

However, given the complexity and magnitude of the bridge collapse, it is sure to be investigated for a long time before insurance and liability issues are finally sorted out.

The Minneapolis Star Tribune had a good article on August 3rd on some of the details involved with liability issues. You can view the article at the following website address:

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