Defective Construction Often An Insurance Issue


Imagine the following scenario: you are a general contractor hired to construct a condominium complex. Your role is supervisory, since you enter into contracts for each aspect of the work with subcontractors.

Unfortunately, as is so often the case on construction projects, mistakes are made—the flashing around the windows is installed backwards. Several months after the project is completed, a rainstorm soaks the area and water pours in through the windows, destroying millions of dollars worth of property. The owner sues you for damages. You tender the claim to your comprehensive general liability(CGL) carrier—this is what you purchased

insurance for, right?—and quickly get a denial: “Defective construction is not covered under your CGL policy.”

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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.

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