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Identify & Analyze
Regulations complicate construction defect risk
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Evaluate & Implement
Proper coverage, risk management steps
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Monitor & Adjust
Keeping tabs on defect coverage strategies
Construction companies will find that jurisdictions have different approaches to interpreting coverage for construction defects. A critical issue for risk managers is to address these uncertainties in a way that ensures coverage is in place.
Legal battles over whether construction defect claims are covered by commercial general liability policies continue to increase in cost and frustrate policyholders. But four states recently have passed unique legislation that defines damages resulting from shoddy or faulty work as occurrences, which may take the battle out of the courts. ›› More
The economic downturn has pushed some contractors to take on jobs in unfamiliar territory. When they take on jobs outside their field of expertise, contractors increase the risk that defects or other problems will occur. ›› More
An integrated product doctrine has been adopted by several states and it is being considered in others. Under the doctrine, tort-based recovery would be barred when a defective product is integrated into a larger product that is damaged by the defective product. Will it affect coverage availability for contractors? ›› More
When subcontractors are involved, coverage interpretations get tricky. There are lessons in the case of a California developer that sued its insurer, which in turned denied coverage because subcontractors did not pay their self-insured retentions. ›› More
Contractors in some cases are covered by defects caused by subcontractors' work. In some states, such damage is considered an occurrence. ›› More
Editor's Picks: Online Solutions & Resources
State laws and construction defects
Variations among state laws as to whether construction defects constitute an occurrence, property damage, or are excluded from commercial general liability is a headache for many contractors. Patrick J. Wielinski of Cokinos, Bosien & Young…
Types of construction defects
What constitutes defects? From roofs to foundations, the conditions that indicate a building may have defects.
Articles from construction experts
The International Risk Management Institute Inc. offers a library of more than 1,000 articles written by construction experts. The articles - covering topics that include construction defect insurance, construction liability, builders risk…
Pictorial dictionary of construction terms
Don't know an abutment from a hook bolt? Educate yourself with this pictorial dictionary of construction terms.
Seven strategies that help contractors identify and manage the construction defect risk also show how they can monitor loss history to uncover preventable trends. Jody T. Wright, senior vp, construction department manager at Lockton Cos. L.L.C. in Denver, explains how that's done. ›› More
A controversial ruling in Hawaii that damage resulting from construction defects does not constitute an occurrence triggering coverage under a commercial general liability policy has prompted some insurers to alter policy language to make it clear that they intend to pay such losses. ›› More
In a Business Insurance webinar, construction risk and insurance experts offer advice on how to manage defect risks with the proper risk management team, approach and coverage. ›› More
Editor's Picks: Online Solutions & Resources
Mediating construction defect disputes
When disputes over construction defects occur, mediation can be used to settle them. It's an increasingly popular way to resolve disputes at a time when contractors' finances are tight.
Limiting and preventing construction defects
Insurers have a stake in controlling construction defect claims. What they can do to limit their exposure and educate contractors in preventing defects.
Checklist offers blueprint for coverage
A comprehensive insurance checklist and risk profiler from the Associated General Contractors of America ensures that exposures are identified and coverage is in place. Complete it with your broker.
