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Contractors welcome liability task force

John Seelmeyer

A construction group that helped stir a

ruckus about contractors’ liability insurance

in Nevada says it’s happy to see the creation

of a state task force on the issue.

A lawyer who’s successfully sued homebuilders

contends, however, that the building

industry needs to clean up its act to get

insurance premiums under control.

Alice Molasky-Arman, the state insurance

commissioner, responded to a request

by Gov. Kenny Guinn to create the group

to study the causes of problems with construction

liability.

The task force, which began meeting

last week, will look at reasons that litigation

over construction defects is up sharply

and also will study reasons that contractors

find liability insurance is more expensive

if it’s available at all.

The insurance commissioner’s move

drew applause from Rick DeMar, head of

the Carson City-based Builders Association

of Western Nevada.

“It’s a good sign that the commissioner

did something other than offer a 1-800

line,” DeMar said.

DeMar noted the state task force members

include Steve Hill, who represents the

Coalition for Fairness in Construction, a

statewide group that has sounded the alarm

about liability insurance. The coalition

includes contractors, insurers, lenders and

representatives of the real estate industry.

“Our goal is to restore common sense

and reason to our wildly litigious environment,”

Hill said. “This problem threatens

the livelihoods of thousands of Nevadans

employed in the construction industry, and

pushes the cost of new homes out of reach

of working families across the state.”

A trial attorney who recently won a $12

million construction-defect case on behalf

of a southern Nevada condominium association

said the construction industry

brought problems on itself.

“They’re not willing to sacrifice profits

for quality,” said attorney Scott Canepa.

He said liability insurance premiums

have risen across the economy in recent

months, and he strongly disagreed with construction

industry claims that constructiondefect

lawsuits have been frivolous.

He said no construction-defect case in

the state has been rejected by a judge as frivolous,

and he said contractors and their

insurers have won only one case that was

taken to a jury.

Other members of the task force

include:

* Joyce Smith, whose Carson City electrical

company has about two decades

experience in construction.

* Matthew Sharp of the Nevada Trial

Lawyers Association.

* Kay Lockhart, representing the

Nevada Independent Insurance

Agents.

* Mark Sektnan, representing the

American Insurance Association.

* Glen Sheard, a member of the

Commissioner’s Property Casualty

Advisory Committee, who represents

the general public on the task force.

Molasky-Arman said she expects the

task force will present long-term solutions

to the liability insurance problems.

After a July hearing on the issue drew

some 800 people from the construction

industry, the insurance commissioner established

a clearing house for liability insurance

and launched a market assistance program.

Members of the Coalition for Fairness in

Construction and others in the construction

industry have said they’ll seek legislative

action including better definition of the

liability of contractors as a long-term

solution to the problem.

The Builders Association of Western

Nevada is studying the possibility of creating

its own liability insurance program to meet

the needs of its members.


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