Construction Defect is a phrase contractors do not like to hear.
Construction defect claims can be defined as damages resulting form faulty work or workmanship. Court decisions and state regulations make managing the risk of construction defects more than just prevention.
Construction Defect Insurance
The CGL policy underwent a major revision in 1986. The changes sought to clarify and to simplify the "property damage" exclusions. The changes were not, however, intended to change the exclusions meaning or effect. Not every policy is created equal. Make sure your contractors insurance does not have defect exclusions.
“Now, an ‘occurrence’ is typically defined under a CGL as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” In other words, a threshold coverage question is whether the Homeowners’ lawsuit alleges property damage caused by an occurrence.” Property
Legal battles will continue over whether construction defect claims are covered by commercial general liability policies. This will cause increases in the cost of contractors insurance.
Construction Defect Risk Management