Chinese Drywall and Insurance Coverage for the General Contractor

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This essay was written by Clay Olson during Spring, 2010 as a response to numerous questions regarding "Chinese" Drywall product which remains a newsworthy topic throughought the Southeastern United States. The product manufactured by Germany's Knauf corporation was imported to the US as a reaction to shortages after a series of high wind events, hurricanes, and other weather events which reaked havoc on the Gulf Coast (Alabama, Mississippi, Florida and Louisiana) prior to Hurricane Huge during 2002, 2003, and 2004. There is much speculation as to the true impact of the product and how this will be realized by the homeowning public.

Many people forget about contractors and insurance companies that underwrite insurance policies on behalf of the building community. Who actually pays the bill should homeowners file lawsuits? Hernandez v. Knauf (LA) was decided just after Mr. Olson's article, as was a Virginia case transfered to Louisiana (Germano, et al. v. Taishan Gypsum Co. Ltd.). These cases illustratedd the fact that the judiciary will seek to help those homeowners harmed by having their homes tainted with the sulfer-like "toxic" drywall.

The article tries to explore how insurance companies insuring home builders will handle claims. Will exclusions in coverage prevail, leaving homeowners and builders with no remedy or, rather, will insurance pay these claims at the risk of astronomical costs?

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Clay Olson, Watson Law Group | Attorney Advertising

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