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Can Construction Defects Be Claimed on Insurance?

When a construction defect occurs, it can be confusing and upsetting. A defect can occur due to a variety of reasons, including poor workmanship, improper materials, negligence, improper site preparation, poor workmanship, defective materials/equipment, or poor site selection. When a defect occurs, a contractor may need to correct the issue, which can be costly. When this is the case, many contractors find themselves looking for help from their insurance company to help with the cost of materials and labor. 

If you are accused of a construction defect, before contacting insurance, you should contact Miami construction defect lawyers, who will discuss your rights and the best course of action. Due to the complexities of the construction industry, these issues can progress into litigation for contractors, subcontractors, and project owners. 

Related: Are Construction Defects An Occurrence for Insurance?

Common Construction Defects

Construction defects may be patent (noticeable right away) or latent (detected later on, sometimes months or even years later). There are a few construction defects that are common in the construction industry:

  • Electrical systems issues
  • Foundation issues (i.e., wall, roof, and floor cracks)
  • Water/plumbing issues
  • Drainage issues
  • Landscaping/soil issues
  • Mold/dry rot
  • Heating/electrical issues
  • Water and plumbing issues

Bonds vs. Commercial General Liability

Construction defects may be covered by bonds. However, the bigger question is whether these defects trigger coverage under Commercial General Liability (CGL) as an “occurrence.” 

Under a CGL, an “occurrence” is an accident that includes continuous exposure to the same harmful conditions. Bodily injury or property damage must be caused by an occurrence during the policy period in order to trigger coverage. Many construction defect litigations occur as a result of whether certain defects qualify as an occurrence, thereby triggering coverage. 

When determining defect coverage, an analysis of coverage should be completed with Miami construction defect attorneys to determine if the claim is within the scope of the policy. An occurrence cannot be assumed, despite previous cases potentially being covered. 

Related: What’s the Difference Between Bonds and Insurance?

Defective Workmanship

Typically, defective workmanship is not considered an occurrence under a CGL policy, which means there is no coverage. However, in some states, the courts have ruled that defective workmanship can be an occurrence. The issue lies with each state coming to its own conclusion as to whether or not defective workmanship can be classified as an occurrence.

In most states, construction defects are an occurrence as long as the damage was unexpected by the policyholder or where property other than the work performed by the policyholder is damaged. 

If you have issues with a construction defect, Cotney Construction Law’s experienced attorneys will provide sound legal advice to construction professionals at every level and can assist your firm with any construction need. Not only do we advise our clients on legal matters, but we also provide a myriad of other valuable services for construction businesses, including contract review, employment law advice, and litigation and arbitration services. We also advocate for clients involved in licensing complaints, permitting issues, stop-work orders, business immigration, and more. 

If you would like to speak with one of our Miami construction defect lawyers, contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.