Have you been involved in an accident on a construction site in Hawaii? If so, a ruling from Hawaii’s Court of Appeals may be relevant.
In Group Builders Inc. and Tradewind Insurance Co. Ltd. vs. Admiral Insurance Co., the Court held that any damage resulting from construction defects does not automatically activate coverage under a general liability policy. This means that any breach of contract or tort claims based on construction defects are not covered under CGL (commercial general liability) polices.
Based on this ruling, it some insurance companies have altered their policy language to make it clear that they will pay out if property damage resulted from construction defects.
This case came as the result of construction flaws in the Hilton Hawaiian Village's Kalia Tower. A year after the hotel opened, they were forced to close 21 floors because of mold in the guest rooms. The Hilton sued the subcontractor, Group Builders Inc. that was responsible for installing the insulation.
The Court did find that there were “numerous material defects in the design and construction of the tower. Some of these defects substantially contributed to or caused the mold growth.” However, they stated that the CGL policy did not cover these defects.
In response to this case, the Hawaii legislature passed “Act 83” which states that the terms of insurance policies must be understood in accordance with the reasonable expectations of the parties.
Both Act 83 and details of the Group Builders case are important developments in Hawaii construction law. If you have been involved in any kind of matter involving construction defects or accidents, contact an experienced Hawaii lawyer at the Honolulu law offices of Cronin, Fried, Sekiya, Kekina & Fairbanks to schedule a free initial consultation.
Posted in Personal Injury