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					   Nabholz Construction
      Corporation

Risk Management Workshop

       October 2004
Risk Management
What is the “American Contractors
Insurance Group” all about?


 ACIG is a Bermuda based insurance company
 group originally formed in 1981 by three
 construction companies that had "had it" with the
 unpredictable cost and coverage swings from the
 traditional property and casualty insurance
 markets available to contractors. ACIG's
 membership has since grown into a nationwide
 network of quality contractors.
Business Profile of Members



                                 General




             12         15
Industrial



                  9

                             Street and Road
Nabholz Construction Corporation
Risk Profile

         Reinsurance        Umbrella Liability
        (Risk Transfer)      (Risk Transfer)
                                 (Zurich)


          $1,750,000            $1,750,000
         Pooled Layer          Pooled Layer
            of Risk               of Risk

            Nabholz              Nabholz



           $250,000             $250,000
           Ded/Retro            Ded/Retro
            Nabholz              Nabholz

    Workers’ Compensation    General Liability
             ACIG              ACICRRG
Nabholz Construction Corporation
Historical Experience Modifier

 0.7                             0.66
                        0.62               0.63
        0.61

 0.6            0.54


 0.5


 0.4


 0.3


 0.2


 0.1


  0
       2000    2001    2002    2003     ACIG Avg.
                                          2002
Understanding EMR




   Policy   Policy    Policy
    Year     Year      Year


   6/1/00    6/1/01   6/1/02   6/1/03    6/1/04
                                          EMR
                                        Effective

        Experience Period
Understanding EMR (Cont.)




                       Actual Losses
      EMR =
                     Expected Losses*


      *Function of class code by $100/payroll
     “Known for the companies we keep”
                 MIDWEST

Ajax Paving Industries, Inc.    Madison Heights, MI   Street & Road
BMW Constructors, Inc.          Indianapolis, IN      Industrial/Specialty
BOR-SON Construction, Inc.      Minneapolis, MN       General Building
Clarkson Construction Co.       Kansas City, MO       Street & Road
Dan’s Excavating, Inc.          Shelby Township, MI   Street & Road
Duininck Companies              Prinsburg, MN         Street & Road
Berglund Construction Company Chicago, IL             General Building
Graycor Services L.L.C.         Chicago, IL           Industrial/Gen. Bldg.
Herzog Contracting Corp.        St. Joseph, MO        Street & Road
McBride & Son Enterprises, Inc. St. Louis, MO         Residential
McCarthy-Bush Corporation       Davenport, IA         Street & Road
Murphy Company                  St. Louis, MO         Industrial/Specialty
The Pepper Companies, Inc.      Chicago, IL           General Building
The Weitz Company               Des Moines, IA        General Building
William Charles, Ltd.           Rockford, IL          Street & Road
    “Known for the companies we keep”
          SOUTHEAST & EAST

SOUTHEAST
Hoar Construction, LLC        Birmingham, AL       General Building
Phillips & Jordan, Inc.       Knoxville, TN        Excavation/Heavy
Roy Anderson Corp             Gulfport, MS         General Building


EAST
The Danella Companies, Inc.   Plymouth Meeting, PA Underground Utility
Danis Building Construction
   Company                    Dayton, OH           General Building
LeChase Construction
   Services, LLC              Rochester, NY        General Building
G.A. & F.C. Wagman, Inc.      York, PA             Gen./Street & Road
J J White, Inc.               Philadelphia, PA     Industrial/Specialty
    “Known for the companies we keep”
         SOUTHWEST & WEST
SOUTHWEST
Brock Enterprises, Inc.               Beaumont, TX      Industrial/Specialty
J.D. Abrams, LP                       Austin, TX        Street & Road
McIntyre Construction Company         Dallas, TX        General Building
Nabholz Construction Corporation*     Conway, AR        General Building
U. S. Contractors                     Clute, TX         Petrochemical
Williams Bros. Construction Co., Inc. Houston, TX       Street & Road


WEST
The Brady Companies, Inc.             La Mesa, CA       Interior
Charles Pankow Builders, Ltd.         Altadena, CA      General Building
Hoffman Corporation                   Portland, OR      General Building
Jaynes Corporation                    Albuquerque, NM   General Building
J.L. Davidson Co.                     Santee, CA        Specialty
Kitchell Corporation                  Phoenix, AZ       General Building
KS Industries, LP                     Bakersfield, CA   Industrial/Specialty
*Nabholz entry date was 10/01/2001.
Nabholz Construction Corporation


      Safety Management
          Michael Overholt, CSP
American Contractors Insurance Group, Inc.
Managing Safety in the
Workplace Presents
Some Interesting
Challenges…
We Only Hear About A Small Part Of
What Is Actually Going On…
We Constantly Have To Juggle
Priorities And Concerns…
In Safety, We Have To Deal With…
Surprises…
With … Wisecracks ...
With Whiners ...
So… You Think You Have The
  Worst Job In The World?
Taking it to the Next Level


   Group/team
   approach keeps
   everyone
   involved/
   motivated
   (ACIG
   partners).
Nabholz Construction Corporation


  Taking it to the Next Level

  • It saves lives

  • Morally, the right thing to do

  • Adds to company profitability

  • Enhances company image

  • Best of the best
Nabholz Construction Corporation


Our Safety Program is…
  Safety                                                           Critical
                                                                                       Quiet        Transparent            Integrated



                                                                                                                     WORLD CLASS
                                                                                                                                                  Equal




  Management                                                       Thinking
                                                                   Shift                                             The “Stealth” Organization



  (R)evolution                                                      Process       Leader-
                                                                                                                     Progressive
                                                    Systemic        Design        Driven       Collaborative
 Changing                                                                                                            Safety Responsibility:
                                                                                                               Management Driven/Employee Owned
 Organizational                                                                 Excellence                                 Perceived:
                                                     Radical                                                        Good Business Investment
 Culture                                             Organizational                    Safety Is:
                                                                                     A PROCESS
                                                     Change                                                           Management Characteristics
                                                                                 A system we manage.

                                                                                                           • Accidents: Intolerable, no excuses

                                                   Symptoms                                                • Safety is a measure of management
                               Line/Staff   Blood (Behaviors/                    Quick Fix                   effectiveness
                               Conflict     Cycles Conditions)     Committees    Programs
                                                                                                           • Decisions: time consuming and difficult

                                                                  The NORM                                 • Planning: long-term; 3-5 years

                                               Naturally Occurring Reactive Management                     • Responsibilities/Expectations: clearly
                 Significant                                                                                 defined

                 Financial                             Traditional                                         • No glitz or hype
                 Crisis                                                                                    • Employee Involvement: win/win
                                                             Safety Responsibility:
                                                        Not Understood (a staff function)                  • Communications: informal, open,
                                                                   Perceived:                                encouraged
High                     Adversarial   Litigation        A Cost (part of doing business)
Insurance    Excessive   Employee      Statutory                                                           • Accountability established, measured,
                                                               Management Characteristics                    recognized
Costs        Losses      Relations     Ignorance
                                                         •   Incidents: excused
                                                         •   Compliance is the goal
                                                         •   Likes "cookbook" approach
                 SWAMP                                   •   Little accountability                                           Safety Is:
                                                         •   Lack of employee involvement                                 A CORE VALUE
    Safety Without Any Management Process                •   High visibility and glitz                             Safe is how we do business.
                     Safety Is:                                      Safety Is:
                     IGNORED                                       A PROGRAM
            That’s why we buy insurance.                         “Activities” we do.
                                            S ignificant
                                            F inancial
                                            C risis

High                               Adversarial     Litigation
Insurance        Excessive         Employee        Statutory
Costs            Losses            Relations       Ignorance



                       SWAMP
            Safety Without Any Management Process

                             Safety Is:

                     IGNORED
                 That’s why we buy insurance.
                           Symptoms
Line/Staff    Blood        (Behaviors/                     Quick Fix
Conflict      Cycles       Conditions)     Committees      Programs


                                            The NORM
             Naturally Occurring Reactive Management


                         Traditional
         Safety Responsibility: Not Understood (a staff function)
               Perceived: A Cost (part of doing business)
                     Management Characteristics
                     •   Incidents: excused
                     •   Compliance is the goal
                     •   Likes "cookbook" approach
                     •   Little accountability
                     •   Lack of employee involvement
                     •   High visibility and glitz

                              Safety Is:

                    A PROGRAM
                         “Activities” we do.
Industry Leadership – “Best Practice”

                                             Critical
                                             Thinking
                                             Shift

           Process     Leader-
Systemic   Design      Driven     Collaborative




              Excellence
                     Safety Is:

              A PROCESS
                A system we manage.
Quiet              Transparent              Integrated         Equal


                               WORLD CLASS
                        The “Stealth” Organization


                        Progressive
    Safety Responsibility: Management Driven/Employee Owned
              Perceived: Good Business Investment
                   Management Characteristics
        •   Accidents: intolerable, no excuses
        •   Safety is a measure of management effectiveness
        •   Decisions: time consuming and difficult
        •   Planning: long-term; 3-5 years
        •   Responsibilities/Expectations: clearly defined
        •   No glitz or hype
        •   Employee Involvement: win/win
        •   Communications: informal, open, encouraged
        •   Accountability established, measured, recognized

                               Safety Is:

                   A CORE VALUE
                    Safe is how we do business.
Nabholz Construction Corporation

So, where does Nabholz fit in...

  SWAMP

  NORM

  EXCELLENCE

  WORLD CLASS
 Costs of Accidents are Like an Iceberg

                                                Direct Costs
                               • Medical
                               • Compensation


                                      Other Workers
                                      • Assisting injured
             Injured Employee         • Decreased productivity
             • Wages                  • Replacement worker
             • Reduced productivity   Supervision/Management
             Jobsite                  • Owner/media
             • Investigate, report,   • OSHA
Indirect &     follow-up              Corporate
Uninsured    • Damage to work         • Expense to investigate
Costs        • Damage to equipment    • Decreased profits
             • Schedule delay         • Increased EMR
             • Replacement worker     • OSHA penalties/contest
             • OSHA inspection        • Claims
                             Fatality

                            Lost Time

                     Medical Treatment

                       First Aid Case

                            Near Miss
Safety Triangle
Based on Heinrich's Theory of Accident Causation



                      Ratio: 300-29-1
General Liability Safety Measures

• Adjacent property exposures.

• Owner occupancy during construction.

• Barricades, signs, and fencing.

• Vibration.

• Fire protection/systems interruptions.

• Completed work defects.

   – Documentation

   – QA/QC SOP

   – Critical installations/photographs
Adjacent Property
 Risk Exposures
Actual Warning Labels

• Sears hair dryer: Do not use while sleeping.

• Dial soap: Use like regular soap.

• Marks & Spencer Pudding: Product will be hot after
  heating.

• Rowenta iron: Do not iron clothes on body.

• Nytol sleep aid: Warning - May cause drowsiness.

• Child’s Superman costume: Garment does not enable
  you to fly.
Adjacent Property Risk Exposures

These exposures present a huge risk for contractors.
This session will attempt to identify and quantify those
risks most likely to be encountered by a contractor.

Proper recognition and avoidance of these risks will
ensure that expensive claims are avoided and project
schedules are not impacted resulting in further financial
losses.
Examples of Adjacent Property Risk
Exposures

Damage to Adjacent Structures/Buildings

• Scaffold collapse

• Crane boom collapse

• Wall collapse

• Vibration from pile driving operations

• Fires
Examples of Adjacent Property Risk
Exposures

Damage to Adjacent Structures/Buildings (cont.)

• Unauthorized use of construction equipment

• Vibration or fly rock from blasting operations

• Interruptions of fire protection systems

• Contamination of HVAC systems from fires or other
  airborne pollutants
Examples of Adjacent Property Risk
Exposures

Damage to Existing Infrastructure

• Rough terrain equipment used on roadways and
  parking lots

• Damage to underground utilities during
  excavation/trenching operations

• Damage to overhead utilities during crane operations

• Pollution of nearby lakes or streams
Examples of Adjacent Property Risk
Exposures

Loss of Use/Business Interruption

• Damage to Underground Utilities

   – Fiber optic cable – owner and customer impacted

   – Interruption of services to a business

   – Blockage of sewer system causing back-ups,
     and/or flooding

   – Telecommunications/Cabling

   – Wireless networks
Examples of Adjacent Property Risk
Exposures

Loss of Use/Business Interruption (cont.)

• Interference with Customer’s Access

   – Re-routing of traffic flow

   – Blocked streets due to construction equipment
     and material deliveries
Examples of Adjacent Property Risk
Exposures

Personal Injury/Physical Damage to General Public

• Personal injury from objects dropped from heights

• Personal injury from tripping/slipping

• Personal injury/physical damage from windblown
  construction materials or debris
Hurt At Work!

You’ve carefully thought out all the angles. You’ve done
  it a thousand times. It comes naturally to you. You
  know what you’re doing, its what you’ve been trained
  to do your whole life. Nothing could possibly go
  wrong, right ? ? ? Think again.

				
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