Construction Risk Insights: EIFS and Managing Your Risk

By | March 10, 2014

Construction Risk InsightsIn response to the surge in construction defect claims in recent years involving exterior insulation and finish systems (EIFS), most insurers have placed broad EIFS exclusions on nearly all contractors’ general liability policies. As a result, contractors who install EIFS have been forced to look elsewhere for coverage, such as risk retention groups, or have gone uninsured.

Despite coverage difficulties, architects and engineers continue to specify EIFS. In fact, the EIFS Industry Members Association (EIMA) reports it is the most widely-used wall cladding in commercial construction in the United States, with a nearly 30 percent market share. Given its popularity and lack of coverage, the overriding issue with EIFS, then, is ensuring proper installation and application methods.

What is EIFS?

EIFS, also called synthetic stucco, are a building product that resemble traditional masonry stucco finishes. EIFS are popular due to the variety of colors and textures available, and special architectural features that can be easily created.

Why the Exclusions?

Initially there were only barrier EIFS products. Barrier EIFS resist penetration of water at the outer surface, but does not allow water that gets behind the outer surface to drain out of the wall system, leading to many claims for water damage, mold and related construction defects.

New Systems

EIFS are now available as a drainable system, which, according to the various manufacturers, when properly applied and installed, is a very effective wall-cladding system for both commercial and residential applications.

If you are working with EIFS, the following proactive tips are designed to help you limit your risk.

Design and Specifications

As a contractor, you’ll want to ensure that all EIFS products are installed in accordance to the architect or design engineer’s specifications throughout the job. These specifications are generally based on ASTM or model building code standards and ensure quality of materials.

Installation Considerations

For any cladding to be effective, moisture entry points must be adequately flashed and sealed, and other watershed components must be properly installed and maintained. The best way to avoid moisture problems is to employ only code-compliant application practices and high-quality, properly installed wall components, including permeable sheathing and effective flashing and sealants around critical moisture entry points. All wall claddings are designed to resist moisture – it’s how they are installed and maintained that makes the difference.

If you are hiring a subcontractor to install EIFS, verify that the subcontractor is bonded, which provides more assurance they have a sound financial and performance record.

Training

It is recommended that contractors use only one manufacturer’s system and are adequately trained for that system. The Association of the Wall and Ceiling Industries (AWCI) established the EIFSmart Contractor Distinction in 2002 as a way to identify highly qualified EIFS installers. To be eligible, a minimum percentage of a contractor’s staff at each job site must complete a training course and pass a certification. While the EIFSmart distinction does not guarantee quality of work, it does demonstrate the contractor’s commitment to training and education.

Quality Control

Part of the problem in EIFS installation is that each manufacturer’s system is different, and therefore, installation techniques vary. If different products are mixed on the jobsite, it can cause immense problems. Quality control procedures must be in place at each jobsite, and contractors have to be willing to say “no” when asked to take shortcuts or work around the proper installation method. Of course, all procedures should be adequately documented. Certain protections can also be built into the contract documents to help limit problems and misunderstandings.

Additional Resources

Contact the American National Standards Institute (ANSI) for a copy of the EIMA 99-A-2001 standard. This document establishes the minimum requirements for specifying and installing EIFS and offers design considerations and performance characteristics for EIFS with drainage. A copy can be obtained at www.webstore.ansi.org/ansidocstore.

Another useful standard is ASTM-C 1397. It addresses the minimum requirements and procedures for field and prefabricated application of Class PB EIFS. A copy can be obtained by contacting The American Society for Testing and Materials at (610) 832-9585.

In addition, the National Association of Home Builders (NAHB) offers a pamphlet on how to protect wood sheathing from moisture damage and is available from www.nahb.com.

While EIFS present coverage challenges, they are widely used due to their versatility, and use is expected to continue to grow. Perhaps with best practices in place, insurance carriers will review their stance on this issue. In the meantime, establishing and following quality installation practices is your best risk management approach. Please contact The Buckner Company if you would like to further discuss ways to manage your risk.

EIFS and Managing Your Risk

In response to the surge in construction defect claims in recent years involving exterior insulation and finish systems (EIFS), most insurers have placed broad EIFS exclusions on nearly all contractors’ general liability policies. As a result, contractors who install EIFS have been forced to look elsewhere for coverage, such as risk retention groups, or have gone uninsured.

Despite coverage difficulties, architects and engineers continue to specify EIFS. In fact, the EIFS Industry Members Association (EIMA) reports it is the most widely-used wall cladding in commercial construction in the United States, with a nearly 30 percent market share. Given its popularity and lack of coverage, the overriding issue with EIFS, then, is ensuring proper installation and application methods.

What is EIFS?

EIFS, also called synthetic stucco, are a building product that resemble traditional masonry stucco finishes. EIFS are popular due to the variety of colors and textures available, and special architectural features that can be easily created.

Why the Exclusions?

Initially there were only barrier EIFS products. Barrier EIFS resist penetration of water at the outer surface, but does not allow water that gets behind the outer surface to drain out of the wall system, leading to many claims for water damage, mold and related construction defects.

New Systems

EIFS are now available as a drainable system, which, according to the various manufacturers, when properly applied and installed, is a very effective wall-cladding system for both commercial and residential applications.

If you are working with EIFS, the following proactive tips are designed to help you limit your risk.

Design and Specifications

 As a contractor, you’ll want to ensure that all EIFS products are installed in accordance to the architect or design engineer’s specifications throughout the job. These specifications are generally based on ASTM or model building code standards and ensure quality of materials.

Installation Considerations

For any cladding to be effective, moisture entry points must be adequately flashed and sealed, and other watershed components must be properly installed and maintained. The best way to avoid moisture problems is to employ only code-compliant application practices and high-quality, properly installed wall components, including permeable sheathing and effective flashing and sealants around critical moisture entry points. All wall claddings are designed to resist moisture – it’s how they are installed and maintained that makes the difference.

If you are hiring a subcontractor to install EIFS, verify that the subcontractor is bonded, which provides more assurance they have a sound financial and performance record.

Training

It is recommended that contractors use only one manufacturer’s system and are adequately trained for that system. The Association of the Wall and Ceiling Industries (AWCI) established the EIFSmart Contractor Distinction in 2002 as a way to identify highly qualified EIFS installers. To be eligible, a minimum percentage of a contractor’s staff at each job site must complete a training course and pass a certification. While the EIFSmart distinction does not guarantee quality of work, it does demonstrate the contractor’s commitment to training and education.

Quality Control

Part of the problem in EIFS installation is that each manufacturer’s system is different, and therefore, installation techniques vary. If different products are mixed on the jobsite, it can cause immense problems. Quality control procedures must be in place at each jobsite, and contractors have to be willing to say “no” when asked to take shortcuts or work around the proper installation method. Of course, all procedures should be adequately documented. Certain protections can also be built into the contract documents to help limit problems and misunderstandings.

Additional Resources

Contact the American National Standards Institute (ANSI) for a copy of the EIMA 99-A-2001 standard. This document establishes the minimum requirements for specifying and installing EIFS and offers design considerations and performance characteristics for EIFS with drainage. A copy can be obtained at www.webstore.ansi.org/ansidocstore.

Another useful standard is ASTM-C 1397. It addresses the minimum requirements and procedures for field and prefabricated application of Class PB EIFS. A copy can be obtained by contacting The American Society for Testing and Materials at (610) 832-9585.

In addition, the National Association of Home Builders (NAHB) offers a pamphlet on how to protect wood sheathing from moisture damage and is available from www.nahb.com.

While EIFS present coverage challenges, they are widely used due to their versatility, and use is expected to continue to grow. Perhaps with best practices in place, insurance carriers will review their stance on this issue. In the meantime, establishing and following quality installation practices is your best risk management approach. Please contact The Buckner Company if you would like to further discuss ways to manage your risk.


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