Tricks of the Trade: Investigating Contractor Liability Claims
August 18, 2022
Over the past decade, residential and commercial construction investments have steadily increased. Keeping pace with this growth has been the number of contractor liability claims and forensic structural investigations we have conducted.
With major infrastructure and energy projects in the pipeline, the continued expansion of our cities, and the ongoing need for renovations and repairs, adjusters and lawyers need to be aware of these incidents and equipped to manage the claims that can arise under such circumstances.
Challenges related to evidence collection
The golden rule in our work is “time is money.” Therefore, the longer you take to preserve evidence, the greater risk there is of compromised evidence. Ultimately, that means you have decreased negotiating power when trying to settle the claim.
Without properly documented evidence, the claim investigation is compromised. You risk dealing with a poorly investigated claim if you or your expert do not have proper access to a scene. This is true for both the first-party adjuster and the liability adjuster.
Typically, experts are called in when the scene is cleared. The challenge for the expert will be whether others properly investigated the incident or did not. Cases like this could result in missing evidence, making it more difficult to conclude investigations.
Sometimes, the expert needs to get information directly from the contractor who did the work. If this person becomes unavailable, the investigation becomes more difficult to conclude because background information may be secondhand or entirely unavailable. We also face challenges when the claim isn’t recorded to account by the contractor in a timely fashion. Again, this would risk a retained expert’s ability to respond quickly to ensure evidence is not compromised.
A first-party adjuster must ensure that a proper investigation is conducted. You must be vigilant and timely in identifying interested parties early in the investigation. This allows them to retain their own experts to conduct a proper investigation and not challenge you on the spoliation of evidence. Be certain to retain an expert quickly. Delaying such a retainer would only risk securing the evidence needed in an investigation. Finally, ensure you retain the right expert for the claim.
Electrical contractors: Code issues and hazards
An electrical contractor could be in a position to identify an improper installation or electrical condition in a property. In these instances, the installation or condition needs to be remedied. The electrical contractor must bring this to the attention of the building owner to be rectified.
The electrical contractor will occasionally face resistance from the homeowner, usually due to the cost of fixing the problem. However, contractors are not obligated to do so by the electrical code or in any licensing requirements. In serious instances, it is recommended that the relevant authorities, such as the Electrical Safety Authority in Ontario, be notified.
Electrical contractors: Improper installation
An electrical contractor can perform improper or substandard electrical installations. This could lead to an electrical installation causing a fire or an explosion, damage to equipment, or equipment that does not perform its intended task. An improper electrical installation could also cause a safety hazard to people.
Figure 1: The underground parking garage.
A fire and explosion occurred within a parking garage, destroying the permanent main building’s electrical room. During the investigation, it was determined that the incident was caused by an electrical failure of the wiring providing power to the entire building.
In addition to property damage, tenants were out of their apartments for several weeks while repairs were completed.
Figure 2: An area of the ceiling in one of the parking levels, with concrete missing due to the electrical explosion.
The investigation revealed an electrical wire to be the cause of the incident. The electrical contractor who installed the wiring was put on notice early in the investigation. The investigation continued with various interested parties present.
Figure 3: A close-up of the damage that can occur due to a very explosive electrical failure.
Because wiring was installed within the concrete foundation of the parking lot, a lot of concrete was damaged during this electrical failure.
Figure 4: Clear signs of insulation damaged by a drill bit.
During the investigation, areas of the wiring were found with the insulation damaged by a drill bit. Further investigation revealed that the parking garage was experiencing water leaks coming from the concrete ceiling. Another contractor was hired months earlier to seal the concrete to alleviate the water leaks.
The contractor drilled into the concrete to inject foam insulation into the drilled holes. Thus, this incident resulted from work done by the contractor conducting further work once the building was constructed and already wired.
An older gentleman with mobility issues was taking a shower, presumably after turning on the floor heating for the first time. It is assumed that the gentleman slipped and fell on the floor as he exited the shower and could not get up. He received third-degree burns. He was eventually found by his son and taken to the hospital. Unfortunately, he later died of complications due to third-degree burns.
Figure 5: The heat pad in the bathroom (left) and the thermostat for the system (right).
The heated floor in a Florida home overheated, resulting in a severe loss. During installation, heating mats are laid down, and ceramic tiles are installed on top of the mat.
Figure 6: Labels for the in-floor heating mat, showing the rating required for the power supply.
The power supply rating required for the heating mat was 120 volts AC. Our investigation revealed the actual power supply to the heating mat to be 240 V AC. The power supply for the heating mat was double the amount required by the manufacturer.
We confirmed that the electrical contractor improperly connected a 240 V AC power supply to the in-floor heat path. This resulted in the floor overheating. Quick temperature measurements were done during the examination, showing that temperatures as high as 140°F can be reached because of this improper installation.
Roofing contractors: Hot work
Figure 7: Hot work being carried out by a roofer.
Hot work often means an open flame, which can result in fires. Roofers’ torches are used when laying down layers of modified asphalt rolls. The heat from the torches seals the various layers to each other or adjacent layers to the modified asphalt walls. These torches can cause fires. Typically, the curbs are made of wood framing on the inside, which is also combustible.
Figure 8: Roofers applying tar to a roof.
Roofers can also cause fires through the mops they use. Mops are used to apply tar onto the roof. If improperly stored after being used, they could be prone to a fire hazard due to spontaneous heating. A lot of roofers store their mops in a tar park overnight. That’s a safe way of doing it. However, others leave the mop up on the roof.
Sometimes the mop can undergo spontaneous heating overnight and ignite due to weather conditions, resulting in a fire on the roof structure. Aside from the equipment that roofers use, they are sometimes seen smoking on the roof structure. As such, there is an increased potential that a fire can result.
Flooring contractors: Spontaneous ignition of rags
A stain is applied when flooring contractors install or refinish a hardwood floor. The application of the stain is made using rags. These rags can sometimes be used to remove excess stains. In either case, the rags are soaked with the stain.
Figure 9: A contractor staining wood flooring (left) and a sign typically applied to the lid off a stain (right).
A fire can easily occur if the rags are not properly disposed of after the staining. Some stains are prone to a chemical exothermic reaction called spontaneous heating. Linseed oil is an example of a stain additive prone to spontaneous heating.
Rags should be disposed of in a water-filled metal container. The sign in figure 9 dictates how rags are to be disposed of. If we don’t follow these recommendations, we risk having a fire due to the spontaneous heating of the rags.
Flooring contractors: Working with inadequate ventilation
In some instances, a floor finish, such as a polluted polyurethane, is applied to the flooring. This application can generate substantial vapours as the finish cures and dries. In addition, if not ventilated properly, vapours can accumulate at floor level because they are heavier than air.
If a flooring contractor applying polyurethane does not open the windows to the property, vapours could develop. Ignition sources such as flames from the furnace or water heater can ignite these vapours accumulating close to the floor. Such flash fires cause property damage but also personal injuries or even death.
The curing of sprayed-on insulation after application releases heat. If not allowed to dissipate, a fire can result. An application of layers of half an inch to two-inch thickness of the sprayed-on foam insulation is considered safe. However, applying a thicker layer is considered a fire hazard.
A thick layer of foam insulation prevents proper and timely heat dissipation. The proper application would be applying thin layers of foam to an area, allowing each application to cure and cool down. Therefore, it may take several hours before a contractor can apply another layer.
When working in the attic, a contractor needs lighting. Some types of lighting used can be a fire hazard when they come into contact with insulation or combustibles, such as the structural parts of an attic.
If a travel light comes into contact with combustibles for even a short time, it could cause a fire. An example of a travel light that could cause a fire is one with an open cage and an incandescent light bulb with a halogen light bulb. Both these can get extremely hot, generate sufficient heat, and cause a fire.
Walking around the attic in near darkness can result in wiring being stepped on and damaged. In addition, some of the wiring may need to be visible to the contractor. Occasionally, insulation contractors might smoke in the attic, which also spells trouble for the contractor and homeowner.
Although most of them are licensed and good workers, a lot of things can go wrong when working with plumbing equipment. When plumbers are not paying attention to their work, one or more of the following can happen:
- Poor workmanship
- Rushed jobs
- Use of misfit components
- Soldering results in fire
Figure 10: Piping with a waist trainer (left), the original plug (right) and the misfit component (far right).
The component indicated by yellow dotted lines in figure 10 has a plug. If the plug is made of improper material, it will eventually corrode and get consumed. This loss occurred in a hospital and caused approximately $300,000 in damage.
Figure 11: A new building suffered severe flood damage during the first rain.
The right-hand-side image shows that a roof drainpipe needed to be properly supported. As a result, under the weight of the water, the pipe separated and allowed flooding to occur.
Figure 12: The damaged pipes (left) and the buildup of material caused by bacteria (right).
Commercial buildings are provided with wet or dry sprinkler systems. These sprinkler systems need to be maintained and inspected regularly. If this procedure is not followed, disaster can happen. In wet sprinkler systems, the pipes are always filled with water. As such, they need to be flushed at least once a year. This helps eliminate bacteria that can thrive in stagnant water. If bacteria are not eliminated, corrosion can occur. For example, under the material in figure 12, there is significant corrosion to the pipe. This led to wall perforation and flooding.
Figure 13: The house (left) and the improper connection (right).
The installer was supposed to attach the piping to the bathroom of a new home. However, he failed to make a proper connection because it was late in the day. The two parts shown through yellow dotted lines in figure 13 were supposed to be soldered together. However, the plumber failed to solder them. Instead, he shoved them into each other. They failed within weeks, causing significant damage to the house.
Figure 14: The water-damaged cottage.
Winterizing refers to draining pipes and leaving the valves open before the cold season. In this case, the contractor retained to winterize the home and failed to do so. As a result, a lot of pipes froze during winter, causing significant water damage to the house. In addition, because the damage was discovered late, the cottage got mould.
Figure 15: The house after the addition.
A homeowner wanted a new addition to their house and retained a contractor to extend the kitchen. However, the contractor needed to insulate the two buildings properly. During the first winter season, cold air entered the house and caused the freezing of the pipes and flooding.
Figure 16: The severely corroded pipe fitting (right).
In a water treatment plant, a contractor was retained to install piping to run chemicals from one reservoir to another. Unfortunately, the contractor should have realized that the fluid circulating was very corrosive. As a result, they used material that was not corrosion-resistant. The fitting practically melted in a matter of days.
Figure 17: The area of damage in the building.
In this case, the plumbing contractor was not at fault. Rather, the contractor laid down the flooring in the apartment building. The plumber installed plastic pipes, and the next contractor laid down a concrete floor. However, the latter contractor failed to protect the pipe. As a result, when the cement started to harden, it shrank and caused the pipe to fail.
Figure 18: Some of the severely damaged piping in the house.
The entire piping in this house was damaged by corrosion. The party at fault was an electrical contractor. While the homeowner was away, she hired a contractor to do some electrical work. A plumbing system needs to be grounded, but this contractor failed. As a result, the current flowed through all the pipes in the house, which were corroded. This caused significant damage to this property.
Figure 19: One of the heat pumps (left) and the altered valve (right).
A commercial building encountered severe flooding after a rushed job by the contractor. The contractor was required to remove some of the heat pumps in the building. Before replacing the heat pump, they were supposed to isolate the floor and strap the valves to prevent liquid from flowing while the pump was disconnected. Because they failed to do so, when they disconnected the first pump, a lot of water started to discharge.
When they could not find a shutoff valve, they went several floors down to shut off the main water to the building. Realizing their mistake, the contractor altered the valve and claimed it was defective, causing water damage to the building.
Fuel oil suppliers and installers
Oil spillage can cause significant environmental and property damage in several instances. Under the Technical Standards and Safety Act (TSSA), Fuel handling in Ontario is regulated under several regulations and CSA standards. However, many homes in Ontario and eastern Canada still use oil for heating.
Oil spills are usually very expensive claims, and sometimes the installers or fuel suppliers need to follow the recommendations or applicable codes when delivering fuel. One must always conduct a visual investigation when delivering fuel to an oil tank that is located outdoors. However, a driver often delivers the fuel, and drivers need to be properly trained in those operations.
Another reason for oil spillage is the lack of training on equipment usage for homeowners. The standards make the homeowner responsible for maintaining the equipment. However, if a homeowner is not educated, they may not be able to follow proper rules. In such instances, the cause of a loss is negligence.
Figure 20: An oil tank (left) and filter (right).
Oil tanks come with oil filters to collect particles, retain water, and ensure that oil-burning equipment works well. These filters must be replaced annually, usually before the onset of the cold season. In this case, the contractor replaced the filter. However, he mistakenly cross-threaded the connection when he put it back on—a significant amount of oil leaked under that house, which had to be demolished.
Figure 21: The oil tank, surrounded by ice (left) and the damaged shutoff valve (right).
The code requires that oil tanks be protected from falling ice and vehicular movement. This oil tank was located outside the commercial building, and there was vehicular movement around it. When the company was snow plowing during the cold season, they pushed ice against the tank. As a result, they fractured the shutoff valve, which allowed a significant amount of oil to discharge.
Figure 22: An oil tank sitting on an improper foundation (left). The same oil tank after toppling over (right).
Installation of oil tanks is highly regulated. However, contractors do not always adhere to the regulations. When tanks that usually contain 100 litres of oil fail, the environmental impact is dire.
Figure 23: An oil filter with ice still attached to the filter’s lid. The filter canister that separated is shown in the lower-left corner of the image. Frozen water (not frozen oil) can also be seen.
Oil filters must be replaced once a year to eliminate water, preferably before the onset of the cold season. If water stays inside the canister, it will eventually freeze. During freezing, water expands and will inevitably cause the canister to fail.
Figure 24: The oil tank (left) and the shutoff valve that sustained damage (right).
An oil tank installation could be originally according to the applicable code, but things change over time. This is exactly what happened to this oil tank. It was installed on patio stones that were underneath the roof. Because the water was dripping from the roof, the soil settled over time.
When the soil settled, the tank settled. It ended up resting on the shutoff valve. The fuel oil distributor should have observed this condition.
Figure 25: An oil tank that sustained damage (left) and the damaged component (right).
A landscape contractor caused this oil spill. The homeowners wanted to do some landscaping, and they hired a contractor. Unfortunately, when they laid down the patio stones around the house, they lifted the tank by the fuel line, causing it to fail. When the line failed, about 920 litres of oil discharged into the ground. This was a claim of about $800,000.