Boston's 'Big Dig' project: plugging one leak as another may yet open: project to end this year, but legal battles may still lie ahead

Risk & Insurance, May, 2005 by Cyril Tuohy

It's 2005 and contractors and officials involved in Boston's 'Big Dig' should be celebrating the end of one of the most complex and expensive civil works projects in U.S. history.

Instead they are grappling with leaks plaguing the Interstate 93 tunnel under Boston Harbor.

The Massachusetts Turnpike Authority, the state agency responsible for overseeing the project, has blamed general contractors Bechtel/Parsons Brinckerhoff for the latest round of constructions snafus.

Last September, water poured into the vehicle tunnel, snarling traffic and prompting regulators to call for yet another round of investigations.

The contractors have denied any wrongdoing. With the exception of one incident, the contractors insist they have built the project to the specifications of the contract.

A Federal Highway Aministration report issued in April concluded that the tunnels are structurally sound and safe for traffic.

Whatever the final outcome, builders risk, which covers the risk of shoddy construction practices, is insured by Zurich (51 percent) and Ace (49 percent). Builders risk is considered the project's most difficult coverage because of the interpretation involved in assessing fault.

Ginny Greiman, the risk manager for the Central Artery Project. says it's not clear yet whether these latest leaks will be covered by insurance claims or whether the repair work will be charged back to the contractors.

"It's not clear whether it's an insurance claim, cost recovery or a chargeback issue," she said. Project managers are awaiting the results of an inquiry by the state attorney general and U.S. Attorney Michael Sullivan.

General liability is covered by AIG, Lloyd's, Chubb, Starr and Zurich. Workers' comp risk is insured by AIG.

The good news regarding the project, plagued by delays and cost overruns, is that the number of deaths is far below projections.

Only four workers have lost their lives. Consultants had projected that 52 workers would lose their lives by the end of the project.

Greiman said the lower fatality rate was due to management's safety and health program and the incentives given to workers to follow safety rules to cut down on lost time.

"We hope now we can serve as a model on the safety and health and insurance side," she said.

Construction first began in 1993. The bulk of the work took place in 1998, 1999 and 2000. Greiman also said that the low fatality rate was due to the fact that there has not been any catastrophic losses so far.