The facts
A complex renovation project was required on an old historic building. Detailed scope of the project was provided to the insurance company who, in response, priced coverage appropriately after a very careful underwriting procedure.
With the project very close to completion, everything had gone smoothly so far and was due to finish on time. A highly qualified and experienced roofing subcontractor was hired to finalize the last section of the roof. The subcontractor decided to heat some glue with a metal halide bulb. After completing his work, he left the renovation site that evening. However, when he returned the next day at 6:00 a.m., the historic building was destroyed. The subcontractor realized he had forgotten to unplug the metal halide bulb when he left the day before. The bulb failed and the particles that dropped from the fitting ignited nearby flammable debris causing a severe fire.
The result
The historic building was fully engulfed and was a total loss. All parties involved in the project suffered from a catastrophic claim that reached a total cost over $3 million. The claim, including removal of debris from the renovation site that was covered under Victor's Builders Risk policy, could have been prevented by following very basic construction risk management practices.
Risk factors
Risk factor #1
Check for hot spots at the end of every working day. Are any items or tools still plugged in? Are there any areas with smoldering ambers?
Risk factor #2
All debris should be cleared and organized at the end of the day.