Re-Blog From Construction Law Signal-Pennsylvania Supreme Court Declares Insurance Defense Costs May Not Be Reimbursable

Pennsylvania Supreme Court Declares Insurance Defense Costs May Not Be Reimbursable

Posted by Elise M. Carlin on December 02, 2010 

Jonathan A. Cass, senior counsel with Cohen Seglias contributed to this post.

Your company is sued as a result of an alleged constructive defect. You tender the claim to your insurance company and they hire and pay for a lawyer to defend your company. It is later determined that there is no insurance coverage for the construction defect claim. Can the insurance company force your company to reimburse it for all the costs that it spent in defending the action? The answer depends on the language contained in your insurance policy.

Recently, the Pennsylvania Supreme Court determined that an insurer who assumes an insured’s defense is forbidden from seeking reimbursement of defense costs from the insured unless the policy specifically permits it to do so.

READ AL OF THIS ARTICLE BY CLICKING HERE

Re-Blog From The INSURANCE COVERAGE MONITOR-Unexpected Faulty Workmanship is Covered

 Saw  this intersting article on Insurance Coverage Monitor

Unexpected Faulty Workmanship is Covered

Unexpected Faulty Workmanship is Covered

by Jill Berkeley on November 10, 2010

In Sheehan Construction Co. v. Continental Insurance Co., ___ N.E. 2d ___ (Ind. 2010), the Indiana Supreme Court joined those jurisdictions that have found faulty workmanship can be an accident so long as the resulting damage is an event that occurs without expectation or foresight.  The Court recognized that whether an event occurs with a “lack of intentionality” depends on the facts of each case.  It also noted that the CGL insurers, as of 1986, carved out from the “your work exclusion” an exception for work done by subcontractors.  If the initial grant of coverage for accidents did not cover faulty workmanship, there would be no reason for the “your work exclusion.”The facts in this case were typical.  Plaintiffs filed a class action alleging that after experiencing water leaks in their homes, they experienced leaking windows, fungus growth on the siding, decayed OSB sheathing, deteriorating and decaying floor joists, and water damage to the interior of the home including water stained carpeting.  Sheehan Construction Company was the general contractor on the project and was responsible for hiring subcontractors who actually built the houses.  The plaintiffs alleged that these problems were caused by the faulty workmanship of Sheehan’s subcontractors which included lack of adequate flashing and quality caulking around the windows, lack of a weather resistant barrier behind the brick veneer to protect the wood components of the wall, improperly installed roofing shingles, improperly flashed or sealed openings for the chimney and vents, and inadequate ventilation in the crawl space.

READ THE WHOLE ARTICLE BY CLICKING HERE

 

Connecticut Condo Owners Learn the Hard Way That Contractors Without Proper Insurance Can Screw Them Over

You've Been Warned...Read This and Learn...

...The roofing contractor working on the building in October lacked the proper insurance, so owners of all 100 units in the Twin Oaks complex -- not just the 20 in building 106 -- are on the hook for the repair bill. A special $400-plus monthly charge was imposed by the condo association in January to raise $200,000 for emergency roof work, utility safety tests and repairs.

This saddled owners with the added burden of the special assessment on top of mortgage payments and the $300 monthly common fees, without having relief from rental income in 106 Oakwood to defray costs.
Two of the owners in 106 are now in court, facing foreclosure.
The special assessment is an added burden for owners in all five Twin Oaks buildings.
""People were barely making it before," an elderly owner on a unit in neighboring 102 Oakwood Ave. said Friday. "Mother Nature did the damage, but the innocent have to pay the bill."

'It Was Bad'

Contractor KLS LLC of Wethersfield lacked proper insurance for roofing work being done at the time of the storms, though that wasn't determined until after the deluge. The company had coverage for snowplowing and landscaping but not for roofing work, according to the Newington insurance agency, Connecticut Insurance Exchange, listed on the KLS permit applications on file with the West Hartford building department.

Glenn Terk, the contractor's attorney, said Friday that he advised his client not to discuss the issue publicly because of the "potential for litigation." Terk noted that no civil actions have been filed against his client, who had done roofing work in the past for Twin Oaks.

But someone is to blame, Pastor said, and not the tenants, who were just living their lives.

"The contractor was chosen by somebody," he said. "Is this whole thing an issue of building management, of the roof not being properly maintained and so it needed repairs? Is it the condo association? Is it the roofer, for obvious reasons? Everybody is going to blame everybody, but how complicated is it?"

READ THE WHOLE STORY AT THE HARTFORD COURANT BY CLICKING HERE

FROM REUTER's NEWS- Construction Defect Conference Set For Nov 19 to Feature Judges, Lawyers, Builders and Insurer's!

News From Reuters-

LOS ANGELES, Oct. 13 /PRNewswire/ -- Superior Court Judges Hon. Keith Davis of
San Bernardino and Hon. Stephen Sundvold of Orange County will appear on the
faculty of the "Construction Defect Litigation Update Conference" Nov. 19,
2009 at The City Club on Bunker Hill in Los Angeles.

The chairmen of the conference, attorneys Richard Glucksman of Chapman,
Glucksman, Dean, Roeb & Barger, APC of Los Angeles, and Kenneth Kasdan, Kasdan
Simonds Riley & Vaughan LLP of Irvine, Calif. and Phoenix, Ariz., assembled a
list of specialists from the building and insurance industries, as well as
from leading law firms. 

In a review of headlines posted recently by "Mealey's Litigation Report:
Construction Defects," a leading monitor of the litigation published by
LexisNexis, California cases have produced settlements in matters involving
subcontractors for $15,000 in one case and $16,500 in another, while other
cases with a broader range of parties settled for $55,000, $525,000, $632,305,
and $1.3 million. 

READ THE REST OF THIS ARTICLE AT REUTER's BY CLICKING HERE

HOA's; YOU CAN SAVE A LOT OF MONEY BY HIRING UNLICENSED/ UNINSURED CONTRACTORS! Then you too can be liable for a workers injuries!

I saw this article at Community Associations Network (CAN). If you are an HOA, and don't make sure your independent contractors are licensed and insured, you'll deserve the same fate as these folks got...

Heimen et al. v Worker's Compensation Appeals Board

HOA Should Be Sure Workers are Insured California homeowner associations (HOAs) and HOA management companies will want to pay attention to a recent ruling coming out of the state's Second Appellate District. The case, Heimen et al. v Worker's Compensation Appeals Board, involved the claim of a worker injured on association property for worker's compensation benefits. Read more by clicking here.

So the lessons are that any contractor who will be working on your property must have;
workers comp
licensed
liabilty policy naming HOA as add'l insured
Auto Insurance.

You can get extra protection by buying a add on workers comp policy for around $500-1000 per year. Then if someones coverage was lapsed and something happened, you would still be covered. Your choice, pay a little or pay a lot...