Construction defect insurance

by Guest » Tue Jun 08, 2010 08:53 am
Guest

How do we protect ourselves from claims arising out of construction defects?
Should we go for liability coverage?

Total Comments: 8

Posted: Wed Jun 09, 2010 03:35 am Post Subject:

if you could clarify something, I could help...

Are you referring to defects in workmanship or defects in the material? In other words, did your contractor/subs screw up or was the material itself faulty? Both?

InsTeacher 8)

Posted: Wed Jun 09, 2010 09:50 am Post Subject:

Well, we've never had to deal with faulty workmanship. Yes, materials were faulty on all occasions. Now that we're expanding, we're scared of higher claims arising out faulty workmanship too.

Posted: Wed Jun 09, 2010 06:41 pm Post Subject:

Thanks for the reply.

You should already have in place a Commercial General Liability (CGL) policy that will provide coverage for what's known as "Products and Completed Operations." This is the coverage that will pay for liability due to injury or damage caused by defective products or completed work done by an insured person covered under the CGL contract performed AWAY from the insured premises.

This is part of "Coverage A" in a CGL policy, which also includes coverage for bodily injury and property damage caused by an insured.

I would speak to your agent to make sure that the coverage is in place. Let us know if you need anything else.

InsTeacher 8)

Posted: Thu Jun 10, 2010 11:00 am Post Subject:

Insurers find a number of ways to deny your claims. Property damage exclusions are an effective way of claim denial. They'd also question the occurrence.

Posted: Thu Jun 10, 2010 10:20 pm Post Subject:

Insurers find a number of ways to deny your claims. Property damage exclusions are an effective way of claim denial. They'd also question the occurrence.



Wow, sil...kind of cynical, huh? I've found insurers to be the opposite. A carrier cannot simply deny coverage because they want to, their denial has to, and can only be, based on the contract terms.

InsTeacher 8)

Posted: Thu Jun 10, 2010 10:29 pm Post Subject:

Insurers find a number of ways to deny your claims. Property damage exclusions are an effective way of claim denial. They'd also question the occurrence.


Sil, what's the matter with you? Insurer's do not look for ways to deny claims, in fact it's the opposite, they LOOK for coverage! What are you basing this on?

Posted: Fri Jun 11, 2010 06:55 am Post Subject:

Well, I'm sorry if I've hurt your feelings, may be I should contain my emotions from now on.

I've read and heard that CGL policies impose pretty many obligations for the insured (in the form of coverage conditions). The insured is bound to offer a notice regarding claims. He has to cooperate. He's not covered for any voluntary payment that he's made, or for any payment made before the claims notice is issued to the insurer.

These policies are probably meant to cover property damages that occur during the policy tenure. You'd often doubt which policy would cover the damages. Don't you think it's a bit confusing when it comes to coverage disputes?

Posted: Sat Jun 12, 2010 05:35 am Post Subject:

The insured is bound to offer a notice regarding claims. He has to cooperate. He's not covered for any voluntary payment that he's made, or for any payment made before the claims notice is issued to the insurer.



Sil, this is the same, or similar language you'll find in any policy. You never voluntarily pay anything as an insured, plus the rest of the stuff as well. It's like they tell their insured's to never admit fault in an accident, even if it's obvious.

You didn't hurt our feelings, frankly it was the opposite. I was wondering where the heck it came from...did you have a client get burnt on a claim? Just sounded like some old water under the bridge stuff, that's all.

All claims require documentation, all claim require the insured to cooperate with the investigation, all insurers do these things regardless of the policy form. You will see the same type of language in your car or homeowner's policy.

So, what's the deal?

InsTeacher 8)

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