Palley Law

Construction Insurance | Solutions


Stephen Palley represents construction industry clients with insurance related matters. In addition to more than 15 years of litigation, trial and dispute resolution practice, Mr. Palley has extensive experience with insurance related construction contract negotiation and insurance policy review and negotiation. He has has advised clients on the development and negotiation of insurance and risk-transfer programs and claims for some of the largest construction projects in the United States, including power plants, airports, sports venues and hospitals. He is listed as a 2013 and 2014 DC Super Lawyer in the area of construction litigation. Mr. Palley is also a Fellow of The American College of Coverage and Extracontractual Counsel.  Read More



Stephen Palley
Palley Law, PLLC
1750 K Street, NW
Washington, DC 20006

T:  202.847.3964
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April 2014.  Stephen Palley named 2014 Washington, D.C. "Superlawyer" for Construction Litigation Read more

April 2014.  Webinar presentation: Construction Insurance: The Basics, WPL Publishing, May 7, 2014. Read more

March 2014.  Stephen Palley named Fellow of The American College of Coverage and Extracontractual Counsel. Read more

March 2014.  Webinar presentation: Insurance Subrogation, Indemnity and Hold Harmless Releases: Navigating the Complexities, Strafford, March 19, 2014. Read more

January 2014.  Stephen Palley launches Palley Law, LLC, focusing on policyholder insurance coverage representation for the construction industry. Read more

December 2013.  Stephen Palley authors Construction Insurance Chapter for American Bar Association. Read more


Construction Insurance: An Introduction (Book Chapter), Fundamentals of Construction Law, Forum on the Construction Industry, American Bar Association, 2013   | Excerpt | Purchase Book from ABA

"Construction Insurance for Lawyers & Other Professionals" (Book), Lead Editor, Forum on the Construction Industry, American Bar Association, 2012  Purchase Book from ABA (excerpts below)

"Construction Contract Insurance Clauses" (Book Chapter), Construction Insurance For Lawyers & Other Professionals", Forum on the Construction Industry, American Bar Association, 2012

"Construction Delays, Insurance Coverage, and Performance Bonds" (Book Chapter), Construction Insurance for Lawyers & Other Professionals, Forum on the Construction Industry, American Bar Association, 2012

"Insurance Update: 'Boilerplate,'Subrogation Waivers and Choice of Law, 14 Under Construction: The Newletter of the ABA Forum on the The Construction Industry (Apr. 2012)" | Read

"Subrogation Waivers,"The Construction Lawyer, 2011 | Read

“Construction Contract Subrogation Waivers: Dangers, Dilemmas, and Opportunities,” Conference Paper, Forum on the Construction Industry,American Bar Association, 2010

“Credibility and Impeachment of Witnesses,” Missouri Evidence, The Missouri Bar, 2006, Fifth edition, updated 2010

"How Waivers of Subrogation Can Have Unexpected Consequences for ProjectOwners,", 2010

"Bad Smell Can Constitute Property Damage under CGL Policy; Claim Triggered Insurer’s Duty to Defend,", 2010

“CGL Coverage for Construction Contractor Design Exposures,” Risk, 2009

“Design Risk for Contractors and CMs: How Insurance Addresses the Exposure,”, 2009

“Broker Held Liable for Failing to Obtain Insurance for Sub Under Wrap-Up Policy,”, 2009

“More State Supreme Courts Join Majority Holding that CGL Insurance Covers Damage to Contractor's Work Caused by Subs,” The Construction Lawyer, 2008

“The Expansion of Insurance Coverage for Defective Construction,” The Construction Lawyer, 2008"  Read

“Insurance Coverage Under Standard Commercial General Liability Policies for Claims Arising Out of Misuse of Personal Data,” The Secure Times, ABA Section on Antitrust Law, Privacy and Information Security Committee, 2008 Read

“Standard CGL Policies Provide Coverage for Sub's Construction Defects, Florida Supreme Court Holds,”, 2008

“When You Least Expect It, Expect It,” Three & Out: Sports LaweNewsletter, 2007

Contributing author, Recent Developments in Insurance Coverage Litigation, Torts and Insurance Practice Section, American Bar Association, 2007


3/14/2014 | The Settlement Value Widget

For Don James

A caveat to start: the widget/script I describe below doesn't offer legal advice. It includes assumptions about how to value a case that are profoundly subjective and require judgment and experience to have any value. That's part of the point, actually -- read on (you'll also find a link to the tool). More

3/10/14 | Insurance Heuristic

People often ask "do I need to get insurance for [insert activity]?" When writing on the topic not long ago, I realized that the answer depends on two questions: "Idiosyncratic exceptions aside, there are two reasons to buy insurance that apply across the board: 1. because a contract or law requires it; 2. to provide (adequate) financial protection in case there is a loss." True, the questions lead to more questions that may be non-trivial -- whether a contract does or doesn't require a particular type of insurance isn't always obvious. More

3/5/14 | Gittlawoverflow

I'm not the first lawyer to ponder how GitHub could maker a law practice more efficient. But some of the tools -- or as a marketing strategy guy told me to say, "platforms" -- are worth looking at even if you're not going to learn to program. And if you think programming is boring, take a look at "Why's Poignant Guide to Ruby", a guide to the perplexed that's a mashup of code, Crumb, and Borges. More

2/30/14 | Denim Jackets & Raymond Burr

When experimenting with advertising on my law-firm website I was perplexed at first by the ads that were served. The first few were for black denim jackets and some other consumer products. At first I figured it was just random content because my website is new to the system and this was running locally, hadn't been pushed to the site yet. But could it be that the algorithm knows something that I don't? More

2/28/14 | Icebergs and Law Firms

The "business" of law isn't always aligned with a client's best interests, particularly where "billable hours" are in the mix. Take a simple example: say a lawyer settles a case for a client before a trial, the lawyer will generate less revenue for their business (assuming that they bill time on an hourly basis, like most still do) and chances are that if they do that a lot they run the risk of lower hours, lower revenue, and lower compensation (if they’re in a law firm). More


The Settlement Value Widget: It Won't Replace Lawyers

A caveat to start: the widget below does work but it doesn’t offer legal advice. It includes assumptions about how to value a case that are profoundly subjective and require judgment and experience to have any value. That’s part of the point, actually – read on. But it's not intended to offer you legal advice so don't use it as as a substitute for a lawyer.

Nor is this fully featured software – it’s a simple script, and prone to break if you don’t enter the data exactly as requested. What it does do is illustrate how many lawyers think through case valuation and (sort of) the way Don James, of blessed memory, taught us baby lawyers back in St. Louis. “Risk-weighted net present settlement value” is a fancy way of answering the question that we lawyers frequently get and don’t always know how to answer: “what’s it worth?” Mr. James: if you’re watching, I’m sorry if I got it wrong.

Here are the assumptions, if you're curious -- or your can skip to the next paragraph.

var total1 = a * b; Damages weighted by estimated liklihood of success.
var total2 = total1 * c; Value weighted by counsel x-factor -- can go up or down.
var total3 = total2 * d; Value weighted by court x-factor -- can go up or down.
var total4 = total3 + +e; If d add attorneys fees. If p subtract attorneys fees. Here we are only adding.
var total = total4;Here's our rough estimate

In English: you take likely provable damages, weight by (1) chance of success/failure, (2) impact of opposing counsel, (3) impact of court/venue/judge, and (4) add expected legal fees/costs. That will add up to an amount which if you could pay today would be a reasonable settlement value. Think it’s simplistic? This is how it’s done, day in and day out by defense lawyers. Is this the “right” way to “value” a claim? – that’s a topic for another post.

The script was easy enough to put together and deploy. So was coming up with a name for it. “Risk weighted net present settlement value” makes it sound like there’s a very reliable, scientific, prediction underlying the calculation. Maybe. Maybe not. The really, really hard part is getting the inputs. You simply can’t predict the future, after all; things like the “impact” of a particular lawyer on a particular case are difficult to assess. As another lawyer I once worked with liked to say “it’s harder to dance with a bad dance partner.” And more expensive. So the fact that the other side has a “great” lawyer doesn’t necessarily mean that a case is worth more from a settlement value standpoint. It might make it significantly more expensive. And expense (at least in this model) has an impact on ‘settlement value.’ (If you want to see for yourself, you can find it at my website, along with a copy of this post. It’s at the bottom of the page, under the title “widget.” Seems that jquery doesn’t get along with my blog engine).

Mr. James could generate the right inputs quickly, with a half dozen data points. And the right inputs, generally speaking, seemed to lead to remarkably accurate predictions. Simple – right? Years of experience, judgment honed over time. I think he would have looked at my script and guffawed. And not because he was a Luddite. More likely because he knew how hard the inputs would be for most people.

Sometimes less is more, but only if you know how to use what you’re given. “Heuristic decision-making” offers (sort of) a counterpoint to the wisdom of “big data.” Here’s a link link to a wonderful piece by Profs. Gerd Gigerenzer and Wolfgang Gaissmaier on the topic. (Unfortunately, it’s not public domain so you’ll get an abstract, not the full article, and have to pay for a download.) To my surprise, perhaps part of what the widget demonstrates is the value that a good lawyer still brings to a client. Without that judgment and training : garbage in – garbage out.

There is one thing that is predictable, incidentally, with almost complete certainty. Litigation costs money. So it’s certainly possible to start with what’s most predictable, and then work from that point. Nor am I suggesting that analytics are useless or a fruitless endeavor. Not at all. A data backend to this widget would be interesting, and might be useful. You just have to remeber that the data has to be selected and weighed by someone who can judge what is important and what isn't. For a counterpoint that shows what analytics can do check out Juristat, which provides predictive analytics in the patent space, using statistical analysis, lots of data, and very fast computers. Note that one of Juristat's founders (Drew Winship) is a lawyer also . . . and he also started at Mr. James' firm. There must have been something in the water. Stephen