Archives: Construction defects

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Direct Actions against Insurance Companies

Labor Day has just passed as I write this, and this summer (that went by too quickly) was a busy one for the New Jersey appellate courts, insurance-wise.  The New Jersey Supremes, for example,  dealt with a question often posed by our clients in construction defect cases: Namely, can a claimant proceed directly against a … Continue Reading

The Policyholder’s Right to Independent Counsel

Earlier this year, I posted about whether a policyholder has a right to independent counsel when a possible conflict of interest appears between the carrier and the policyholder.  (You can read that post here.)  We’re frequently asked that question, because when insurance companies agree to defend a claim, they often send a reservation of rights … Continue Reading

More developments in insurance coverage for construction defects

Back in the days of the environmental insurance coverage wars, we on the policyholder side argued (eventually successfully in New Jersey) that the word “sudden”, as used in the 1973 version of the pollution exclusion, meant “unexpected” and did not have a temporal connotation. My friends in the defense bar often criticized us for trying … Continue Reading

Insurance coverage for construction defects

The ongoing battles over construction defect coverage remind me of the good old days in the ‘80’s and ‘90s when we used to fight over asbestos and environmental coverage claims (we still have some of those claims, but to a much lesser extent). Construction defects even involve battles over the appropriate trigger of coverage!  Ah, … Continue Reading

“Ordinance or Law” Coverage for Costs of Repair

I was saddened to learn that Judge Ruggero Aldisert, formerly of the Third Circuit, recently passed away.  I never had the privilege of appearing before Judge Aldisert, and I never met the man, but I feel indebted to him for writing two excellent books that were published through NITA:  “Logic for Lawyers” and “Winning on … Continue Reading

Additional Insured Coverage

Years ago, there was a Bell Labs facility behind my house, and on Sunday afternoons, the engineers (mostly Indian and Pakistani) would get together and play cricket on the large lawn. I watched the matches quite a bit, but I never could get a grip on the rules. Then a British friend told me that … Continue Reading

Direct Actions against a Defendant’s Insurance Company

Since the economy tanked, we’ve seen a number of cases in our office (particularly in the area of construction defects) where a defendant (such as a subcontractor) has become insolvent, and we’ve been called upon to pursue a direct action against that defendant’s insurance company.  Surprisingly, insurance companies don’t really care for this. So, the … Continue Reading

Construction Defects and the “Your Work” Exclusion

My old law partner Carl Salisbury is on the warpath against carriers’ efforts to escape construction defect coverage.  He has some interesting things to say about a recent pro-carrier South Carolina decision.  You can read Carl’s excellent blog post by clicking here.  (I promise not to call them “business risk” exclusions any more, Carl.)… Continue Reading

“Your Work” and the “Products-Completed Operations” Hazard

Here’s some advice I would give to anyone contemplating becoming a general contractor:  Don’t.   The liability insurance coverage picture is too muddy, and coverage for completed operations is too uncertain.  My secondary, and perhaps more realistic, advice: Review your subcontractors’ general liability coverage and make sure there’s adequate protection if you need to bring suit … Continue Reading

Additional Insureds and Certificates of Insurance

A few months back, I got a call from the general counsel of a construction company.  His employer was the general contractor in a construction defect case, and he needed some advice with respect to the applicable “additional insured” coverage. “Now, you do know about this stuff, right?” he asked.  “I don’t want to have … Continue Reading

Insurance Coverage and Allocation Issues Conference

On May 20, 2014, I’ll be speaking at Perrin’s Emerging Insurance Coverage & Allocation Issues Conference at The Rittenhouse Hotel in Philadelphia, PA. My panel (shared with the inimitable Gary Kull of Carroll, McNulty & Kull, representing the insurance industry view of things), will focus on “Best Practices for Additional Insureds.” If you can make … Continue Reading

Completed operations coverage for construction defects

When I was in grammar school, the class wise guy was a kid named Nicky DeLuca.  One day, we were in gym class, and the coach was trying to teach us the importance of fundamentals in basketball.  “You have to have a strong foundation,” the coach said.  “It’s like building a house.  You have to … Continue Reading

Contribution claims between insurance companies

Settling complex insurance claims involving multiple carriers can be like playing three-dimensional chess. (Since I can’t even play one-dimensional chess, that means it’s really difficult.) I once had a multimillion-dollar environmental insurance coverage settlement fall apart because one of the participating carriers would not assume an extra 1% of the coverage, despite (or perhaps because … Continue Reading

Indemnification agreements and builder’s risk

I’ve been working on reviewing a general contracting agreement for a rebuild following Sandy, and the attendant insurance requirements.  I just came across a very useful 50-state survey on the enforceability and construction of indemnification agreements, which you can access by clicking here.  If you’re involved with this area of the law, I think you’ll find it helpful. … Continue Reading

Business Risk Exclusions

Those of us who represent contractors in coverage disputes have had to wrestle a lot over the past few years with so-called “business risk” exclusions, such as the “your work” and “your product” exclusions.  Cynicism may be unhealthy, but the cynic in me says that insurance companies are twisting these exclusions far beyond their intended … Continue Reading

Potential pitfalls in settling with insurance companies

Here’s an interesting situation that recently came up.  A general contractor (Aristone) got sued in a construction defect case involving continuous water damage to a building over several policy periods, involving several insurance companies.  One of Aristone’s carriers – OneBeacon – stepped up to provide a defense.  Another – Pennsylvania Manufacturers – took a “no … Continue Reading

Coverage for class action settlements

Here’s a fairly frequent scenario in the insurance world.  The carrier takes a “no- pay” position on a liability claim.  The policyholder settles the case and then seeks reimbursement from the carrier in a coverage suit.  What exactly does the policyholder have to prove in order to get paid?   In Fireman’s Fund v. Security Ins. … Continue Reading

“Business Risk” Exclusions in CGL Policies

The late, great comedian Alan King used to tell a story that went like this:   “The other day, my house caught fire.  My lawyer said, ‘Shouldn’t be a problem.  What kind of coverage do you have?’  I said, ‘Fire and theft.’  The lawyer frowned.  ‘Uh oh.  Wrong kind.  Should be fire OR theft.’”  Recently, a … Continue Reading

Insurance coverage for construction defects

It’s amazing how, when the economy tanked, construction defects began to multiply exponentially.  I’m not (necessarily) trying to ascribe purely financial motives to the plaintiffs in these cases, but there’s no doubt that, at my firm at least, we’ve seen a marked increase in the amount of coverage litigation over construction defects. So, what’s the … Continue Reading