Construction Defects and Limitations on CGL Coverage

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Course Details

Course Information

smart_display Format
On-Demand
signal_cellular_alt Difficulty Level
work Practice Area
Real Property - Transactions

Date & Time

event Date
Wednesday, August 24, 2022
schedule Time
1:00 p.m. ET./10:00 a.m. PT
timer Program Length
90 minutes

Credit Information

This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00

CLE

ALL

This CLE course will advise construction attorneys on remedies available for construction defect claims, including in states that treat a construction defect as the builder's business risk. The panel will discuss how to pursue claims and how court imposed limitations on CGL coverage for defect claims in certain states present unique challenges.

Faculty

Eric M. Gold

Partner

Pillsbury Winthrop Shaw Pittman LLP

Mr. Gold has in-depth experience analyzing and resolving insurance coverage and commercial construction disputes on behalf of corporate policyholders. He has handled numerous claims involving commercial general liability, professional liability, subcontractor default, commercial property, business interruption, and other policies. Mr. Gold also advises clients concerning insurance and risk management issues that arise outside of litigation.

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Stephen S. Asay

Counsel

Pillsbury Winthrop Shaw Pittman LLP

Mr. Asay’s practice includes advising clients on risk management issues and the resolution of complex commercial litigation, with an emphasis on insurance coverage and construction claims. He has represented clients before state and federal trial courts, commercial arbitration panels, and U.S. government agencies.

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Description

General contractors frequently buy CGL insurance on the assumption that it will cover third-party claims in connection with defective construction. But whether defective construction work constitutes an accidental "occurrence" under the standard form CGL insurance policy--with or without resulting property damage--is dependent on which state's law applies. Determining which state's law applies to a construction defect claim is critical and may be outcome determinative.

Certain jurisdictions hold that construction defect claims do not give rise to an accidental "occurrence" within the CGL insurance policy and may refuse to provide coverage. However, the analysis often depends on the named insured’s scope of work and whether the complaint identifies claims for purely defective work or includes allegations of resulting damage.

Typically, favorable indemnity agreements with subcontractors can protect against relying on insurance coverage, but that requires a solvent and responsible subcontractor. Builders should, when possible, negotiate during the policy procurement process for amended language that broadens coverage or for favorable choice of law provisions. Alternatively, builders may look to other insurance options, including manuscripted Controlled Insurance Programs (CIPs) specifically designed to provide coverage for construction defect claims.

Listen as our authoritative panel discusses proceeding with construction defect claims in jurisdictions across the country. The panel will address best practices to mitigate liability and pursue claims when coverage may not be available.

Outline

Analysis of how jurisdictions across the country address coverage for construction defects
Recent cases addressing CGL coverage for construction defects
1. Virginia
2. Illinois
3. South Carolina
4. Pennsylvania
Best practices for obtaining coverage
Alternative contracting and insurance options

Benefits

The panel will discuss these and other key issues:

What states limit coverage for construction defect claims under a CGL policy?
How can an owner or general contractor frame a construction defect claim to obtain CGL coverage?
What types of additional insurance can provide protection?