Is your Tower Contractor properly insured????

Discussion in 'Managing Projects and Business Issues' started by Clifford Bryan, Apr 3, 2008.

  1. Clifford Bryan

    Clifford Bryan Industry Observer

    I'm no insurance professional, but I know my company pays a fortune every year to maintain the level of General Liability insurance and Workman's compensation insurance that every one of our customers REQUIRE, and for good reason.

    So why is it that I continue to see many other subcontractors doing tower and line and antenna installations for our fortune 500 customers without workman's compensation at all? How can these companies ignore the risk of allowing their primary contractors to hire subs without it? It boggles my mind that the Insurance companies that insure the assets of these large player's don't take steps to verify that all of their master agreements are being met by their general contractors.

    I get several calls every month from subcontractors looking to do work for us, most of whom I KNOW have done, and continue to do work for the same customers I speak of. But when I ask for a certificate of insurance before I can send any work their way, suddenly they either stop calling, or send over a certificate that simply does not fulfill the insurance requirements of our customers.

    I've spoken with several individuals working as "independent contractors" doing LNA work, and they justify the fact that they are not covered under workman's comp by claiming that "the state does not require an independent contractor to have workman's comp" which may be true. However, EVERY ONE of the customers you are working for REQUIRES IT in their master service or subcontractor agreements!!!!!

    I don't mind competition at all, and if there are going to be 500 tower companies within 50 miles of me, I don't mind. But when are we all going to start competing on a level playing field?
  2. Mike Brant

    Mike Brant Guest

    I guess the question is really a matter of how much risk you as a company wish to take. You are absolutely correct in stating that many of the major turnkey players have significant coverage requirements. These major companies are minimizing their risk by placing this requirement on all entities that want to do contract work with them. They normally don't make this a requirement for all the subcontractors that would be used on the projects as:
    a) they don't have a contractual relationship with the subs and
    b) they know if they do, their costs are going to go up. Typically, the only contractual language you may see is in regards to workman's comp, but not in regards to other coverage items.

    Unfortunately, this means it is up to the companies contracting with the big boys to then make decisions about what level of coverage they will require from their subs. If they require their subs to match the coverage limits which they are required to have, then this certainly minimizes their risk, but could impact their ability to the sort of pricing that is also being desired. The one thing I would recommend is that if you as a company decide to require matching coverage, that you make sure you point this out to your customers. This could be something along the lines of "Well our pricing may be a little higher, but unlike some of our competition we require X amount of coverage from ALL of our subcontractors. This best protects our interests and yours."

    I would agree that it seems strange that the insurance companies don't have more say in this. If I was an agent looking to insure a tower construction company, I would certainly give better rates to a company that enacts a policy whereby their subs match (or come close to matching) the insurance coverage for the policy that is being written - it minimizes their risk. I do know that there are now some insurance lines that have been created especially for tower construction companies. Crump is among the companies that offers this (I know this because I have a friend who works there). I don't know the details of this insurance line unfortunately.

  3. Tim Kearns

    Tim Kearns Guest

    We presented this issue very passionately to EIA/TIA and OSHA three years ago at NATE in a closed door session, begging the government agencies to hold the carriers more accountable regarding situations such as this one.

    By driving pricing below fair market value, and not verifying that every company that sets foot on their site carries at least the minimum requirement in insurance, along with pushing unrealistic schedules, the carriers are creating a hazard more culpable than the work itself.

    We hope to see some support on this issue from the three governing bodies as the quest for a uniform telecommunications standard continues.

    Tim Kearns
    T2K Companies, LLC
  4. Paul Russell

    Paul Russell Frequent Poster

    I know that NATE has asked some of the major carriers and tower owners to use NATE members for their construction, but other than some good PR, that they?re safer, more qualified, etc., they don?t provide any documentation and perhaps cannot since some NATE member-companies have had deaths over the years.

    But you have to applaud NATE because at least it is something since nobody or no organization out there is doing anything more. But at the end of the day a blind eye is turned to their request when it comes to bringing the project in under budget and on time.

    What NATE might consider doing is requiring their contractors to provide them each year with their insurance certificates upon their renewal. NATE could then identify to the Crown, American Tower and Verizon-type companies ? basically any company that is interested ? that if they hire a NATE member company they can be assured that the company represents that they meet the minimum levels (whatever that amount is selected to be) of association-required insurance.

    I know that there could be some complications and a liability aspect to this proposal, but it is something that might have value. NATE could always put in the legal caveats to protect their assets in case a contractor submitted inaccurate, expired or fraudulent documents. It would take some work to establish the program, but that?s why companies join the group, and like PCIA, it has a paid staff.

    I?m not sure if OSHA can get involved in setting insurance levels, or any other enforcement since most workers compensation and insurance enforcement cases are handled by state agencies. TIA/EIA would also have a similar problem, but they can at least be patronizing with at least some type of request. However, it boils down to the same problem that doesn?t have a solution, the owners of projects will pay lip service to the request, but will go back to the same non-existent enforcement efforts.

    This is a big problem in the carpentry and roofing industries and they too have tried hard to eradicate the problem with little success. The only perceived benefit the tower industry has is that it is very small and if we can get the major four tower owners and six carriers to enforce insurance requirements, then it would be a huge victory for all contractors.

    Ideally, if we could get a campaign going to get just one tower owner to stand up we might very well find that the others will follow suit. Trying to get towers sited is a big problem. If I was a site acquisition person I would like to be able to go before a zoning board and insure them that ?XYZ Tower? can assure that it is the ONLY major tower company that makes sure that every single contractor on our site meets our high safety requirements and has the proper insurance.

    We?re all seeking a common goal and I do believe it?s achievable. Just because other organizations haven?t been successful doesn?t mean that our industry can?t take the lead and help to solve a problem that effects every contractor in every discipline throughout the nation.

  5. Mike Brant

    Mike Brant Guest

    I don't know what level of participation any of you have had with the emerging state wireless associations, but this may be a good forum within which this issue can be addressed since there is participation from operators, tower companies, and contractors in these organizations (at least in the Texas group with which I am familiar). You can click on the link below to a list of links to various state wireless associations.

  6. Wireless Estimator

    Wireless Estimator Administrator Staff Member

    That?s an excellent approach, Mike. If just one of the associations takes up the issue it could easily become a grassroots movement that might be embraced by other state groups. Many of the state association leaders are executives of the major tower owners and can look into what is a clear concern of the industry, and should be addressed.

    Although the groups are supported by PCIA, they?re independent associations and are less encumbered from having to orchestrate something through the traditional large association bureaucracy and politics. I believe this can be a win-win issue.

    I?m confident that most tower owners are sincere in their desire to ensure that all contractors are properly insured. It might be a shortage of manpower that prevents them from administrating and enforcing their policies in today?s lean and mean business environment. If that is the case then the tower owner could be exposed to a catastrophic lawsuit. According to attorneys specializing in injury compensation cases, although essentially workers compensation is a no-fault system, the courts can rule in favor of a plaintiff against a third-party contractor and/or property owner.

    Although many paragraphs in the prime contractor?s agreement are dedicated to insulating the tower owner from any liability, it is not a guarantee that they?ll never be exposed to the possibility of a multi-million dollar judgment, especially if it can be identified that they were aware of exclusionary enforcement by their management or were contributory towards the accident.

    In a competitive environment it?s easy to presume that contractors that are using subs that do not have the requisite insurance and do not follow proper safety procedures will be able to always be the low bidder. That?s not always true. Oftentimes a company will provide a bid right in line with other proposals, be awarded the project, and still use inexpensive, unqualified contractors, either by choice or by manpower availability. The tower owner, carrier or management company is not always a beneficiary of this cheap labor pool.

    Prime contractors, some of them sporting stellar reputations, need to take a look at their subcontracting policies as well. It?s refreshing to hear Clifford Bryan identify that his firm thoroughly scrubs his subs to ensure that they are in compliance.

    Even that sometimes presents problems. Years ago I had a compliance manager that was responsible for overseeing 4,500 contractors. She did an excellent job and was on top of ensuring that those businesses maintained the company-required safety programs and provided the appropriate certificates of insurance.

    However, one of our prime contractors, no longer in business today, was found to have been providing fraudulent ACCORD forms for almost two years. Fortunately, we did not have to find out following an accident; we were informed of the problem by another contractor. I did not view the alerting contractor?s actions as being anything other than professional.

    I?m not sure if this issue can be resolved by laying it upon the doorstep of the tower owner or carrier and insist that they increase their enforcement procedures?or at least put some in place. It has to be worked out through a joint committee of owners, contractors and other infrastructure providers ? the professional folks you?ll meet in your state wireless association.

    I?d be pleased to assist in this important effort.

    Craig Lekutis
  7. Clifford Bryan

    Clifford Bryan Industry Observer

    Well, I would be more than willing to participate in any action necessary to get this moving in the right direction at a local level. Looks like I will become an Illinois Wireless Association member first, and see where that leads-

    Thank you for your responses and input, I think we are all working towards the same goal!


    Clifford E. Bryan

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