I often speak with prime contractors and owners who assure me that they require subcontractors to name them as additional insureds. This is the correct line of thinking as additional insured treatment is one of the key principals to adequately transfer the risk of construction defects or non property injury. The devil, as they say, … Continue reading Ongoing Operations and Completed Operations Coverage
Brief Facts: Insurance carrier (Harleysville) insured a Developer which was sued under several names or "d/b/a" identities. Developer was sued for construction defects. Carrier defended the claims on behalf of the Developer under various reservations of rights. General verdicts were returned against the Developer entities for $4,500,000.00 in actual damages and $1,000,000 in punitive damages. Insurance carrier then filed … Continue reading Harleysville Decision Confirms Crossman, cautions insurance carriers
In 2001 I mediated my first case as a young lawyer with just enough knowledge to be dangerous.....to myself most likely. Over the past 14 years I have observed the process and it's uncanny ability to resolve the previously unresolvable. Lately I have noticed the indirect, less tangible benefits. That said, a … Continue reading Still a Beneficial Tool, Mediation Process Is Not Perfect
A recent decision in New York has held that a construction manager was entitled to additional insured treatment under a general contractor's CGL policy. Turner Constr. Co. v. Navigators Ins. Co., 2015 N.Y. Misc. LEXIS 2704 (N.Y. Sup. Ct. July 23, 2015). The Construction Manager ("Turner") was hired to "provide pre-construction services and construction … Continue reading Construction Manager entitled to Additional Insured Status
A Florida court has determined that a project owner's (Cypress) general partner was not an additional insured under an insurance policy issued to the Genral Contractor (WPC) who constructed the project. The ruling was made in conjunction with a lawsuit brought by a homeowners association for construction defects, maintenance issues and failure to disclose material … Continue reading Florida Rules Developer Not Entitled to Additional Insured Coverage for Negligent Misrepresentation
Insurance coverage for faulty workmanship is certainly not a new topic on this blog, and states have entertained the issue with varying conclusions for years. The U.S. District Court for the Western District of North Carolina will take this issue on in a case styled Nationwide Mutual Insurance Company v. Hyde. (1:2015cv00137) In Nationwide Mutual … Continue reading North Carolina Courts face coverage for faulty work issue in Nationwide v. Hyde
The Fourth Circuit has provided a reminder for lawyers to obtain consent from its insurers when settling construction defect claims. Otherwise, you risk losing coverage for the claim, which will prevent recovery from the insurer of any settlement amount that you paid. Gaylord National, LLC hired Perini/Tompkins Joint Venture (PT) in 2005 to serve as … Continue reading Settlement of Construction Defect Claim Without Involvement and Participation of Insurance Carrier is a poor idea
In Precision Walls, Inc. v. Liberty Mutual Fire Insurance Co., No. 2013-000787 (S.C. Ct. App. July 23, 2014), the general contractor contracted with Precision for the installation of exterior insulation board. Precision, being an approved applicator sold the installation board in question. After Precision completed its work, a masonry subcontractor began construction of the brick … Continue reading South Carolina Supreme Court Upholds Court of Appeals Bar Using “Your Work” and Product Replacement Exclusions to Deny Subcontractor Recovery
The following article discusses a resurgent construction industry and the nuances which create more liability for injuries on job sites and defect centered litigation. It seems natural that an increase in construction might lead to an increase in litigation, although this article discusses those not so obvious factors which serve as catalysts for litigation. Building … Continue reading Building On a Rebound | PropertyCasualty360
Substantial completion is an often undefined milestone which has been often construed as that time after which a dwelling or commercial building may be occupied. Matt has written an excellent piece which summarizes recent 4th Circuit activity and it’s impact on the construction, insurance, and legal communities.
There is no milestone more significant to a commercial construction project than substantial completion. For an owner, it’s the long-awaited moment it can make beneficial use of its investment. For prime contractors, it’s the moment the owner’s rights to terminate and/or assess liquidated damages is cut off. For subcontractors, it’s the moment contractual warranties typically begin to run. The list goes on and on.
In light of how many legal rights and defenses are tied to the moment of substantial completion, you would think that contracting parties would take extra care to (1) define what constitutes “substantial completion” and (2) ensure that “substantial completion” is achieved in accordance with that carefully crafted contractual definition.
That’s not always the case, as a 2013 decision from the U.S. Court of Appeals for the Fourth Circuit (which includes North Carolina) reveals.
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