Contractors must often plunge into their work without full knowledge of the perils, and insurers "tend not to write policies if they are not able to make the necessary judgments," said Paul Becker, the North American Construction Practice Group Leader for Willis, in testimony submitted to the Senate Subcommittee on Superfund and Waste Management.

The panel is considering a bill introduced by Sen. John Thune, R-S.D., which would prohibit punitive damage awards in catastrophe cleanup worker lawsuits, limit non-economic pain and suffering awards to cases where there was physical harm, and limit such actions to federal court.

Mr. Becker said contractors working in the aftermath of a catastrophe need protection from liability because they often have to do their work without full knowledge of the surrounding area and its potential hazards. He said that time is often a major factor in cleanup efforts, and contractors often begin working without having conducted the tests that would precede the start of a normal job.

A major example of this, he said, can be seen in the work that immediately followed the terrorist attacks of Sept. 11, 2001.

"Normally, before the cleanup of a disaster site starts, environmental and engineering firms conduct studies, run assessments, and issue reports as to the nature of the site and the specifics involved," he said.

However, he added, "due to the outstanding circumstances of the events of 9/11, there was no time for such exercises and contractors got to work without a full understanding of what was ahead. How stable was the ground? What were the asbestos levels? What other hazardous materials could have a long-term impact on health of the workers and general public?"

As a result, Mr. Becker noted that an increasing number of lawsuits relating to worker exposures are being filed. "Only in time will we determine the balance between the insurance purchased against claims now being filed in New York," he said.

"But one thing is certain, litigation upon litigation upon litigation has created a great deal of uncertainty and serious concern among the contractors involved," according to Mr. Becker.

A similar scenario, he said, already has begun to play itself out in the wake of Hurricane Katrina. In his conversations with insurers, Mr. Becker said, companies have expressed concern over the uncertainty in the cleanup environment and the potential legal environment that would follow.

"All these factors substantiate that the traditional methods of risk identification, control and underwriting have been significantly altered and make it difficult to estimate–or even guess–what the full extent of the long-term liabilities arising from the cleanup will be," he said. "It leads us to question whether the insurance industry has the ability to fully underwrite the risks inherent in this work. If this bears out, contractors will be left fending for themselves without adequate insurance protection."

Mr. Becker said the issue was not a matter of if contractors would be facing these issues, but when, adding that "based on our experience, these matters will manifest themselves over a five-to-10-year time frame–though there is already talk of the 'Katrina Cough.'"

All of these factors, Mr. Becker said, make it important that Congress enact some liability protections for contractors.

"While many first-rate contractors are already on the ground participating in this important effort, many others are hesitant to get involved in projects of this magnitude unless they have insurance against what are normally quantifiable risks," he said. "And
carriers, as well, tend not to write policies if they are not able to make the necessary judgments."

He said that "in the case of New Orleans, as it was with the World Trade Center, it will be almost impossible to establish the proper control procedures to protect their interests."

Contractors working in the aftermath of a catastrophe often do their work without full knowledge of the surrounding area and its potential hazards.