Webinar: Construction Defects and the ISO CGL: A Matter of Policy Terms, Law, and Facts

Professionals at meeting

Gerald T. (Jerry) Hargrove, J.D., CIC, CPIA, FCLA, SCLA, PICS, LICS, CBIA

Agents are often asked by their contractor clients if the Commercial General Liability Policy covers a claim for an alleged or actual construction defect. The answer is – It depends! The CGL coverage form primary areas of concern in getting to the answer are:

  • Is there an “occurrence?”
  • Is there “property damage” – damage to or loss of use of tangible property during the policy period?
  • The guiding principles of applying the “your work” exclusion
  • Damage To Property exclusion paragraph j. (5) and (6)
  • Understanding the “Damage To Impaired Property of Property Not Physically Injured” exclusion

The specific jurisdictional law and specific facts of the claim compared to the policy terms and conditions determines the answer to the question. If the CGL is triggered for potential coverage, what are the damages paid?

  • Damages inclusive of the defective work?
  • Only the damage the defective work causes to non-defective work?
  • Rip and tear to get to the non-defective work?
  • Does the result differ as to an insured general contractor vs. a subcontractor?

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