Do you have insurance coverage for that?

Amazing! Do you have insurance coverage for that?

Information about Do you have insurance coverage for that?

Phil Puccio

Contractors are often surprised to learn that they don’t have insurance coverage if the materials they provide break down. A recent case from the 11th centuryth The Circuit Court of Appeals (having jurisdiction over Alabama, Florida and Georgia) upheld the trial court’s decision that a contractor’s insurer is not required to cover claims that the concrete it supplied did not meet specifications.

The controversy arose when Morgan Concrete (“Morgan”) agreed to supply concrete to Georgia Concrete (“Georgia”) for its work on a multi-story building on the Clemson University campus. The contract required the concrete to be able to withstand 5,000 pounds per square inch. During construction of the second floor, Georgia encountered a lack of strength and attempted to order higher strength concrete from Morgan. Morgan said it would provide the right concrete, but shortage problems persisted. Morgan claimed that the shortage problems were the result of Georgia’s mishandling of the concrete from exposure to high temperatures and improper maintenance. As a result, Georgia refused to pay Morgan, causing Morgan to stop further shipments and file a lien on the property.

Georgia then asked Morgan to pay for the damage Georgia suffered from the bad concrete. Morgan then filed a claim with his insurer, Westfield Insurance (“Westfield”), asking for coverage of Georgia’s claims. Westfield told Morgan it would not defend Morgan’s claim and there was no coverage under its policy. Morgan filed suit against Westfield, claiming that Westfield had an obligation to defend and indemnify it. The court ruled in Westfield’s favour, finding that Westfield was not required to further defend himself as there was no claim for “property damage” covered by the insurance policy. The CGL insurance policy between Morgan and Westfield excludes “property damage” to a product manufactured, sold, handled or distributed by Morgan from coverage. The policy covered ‘property damage’ caused by Morgan, but this claim was for a breach of contract to recover costs attributable to repairing his defective product and so there was no property damage.

This dispute exemplifies how important it is for companies to fully understand the scope and nuances of their insurance policies. Contractors and suppliers should understand what type of damage triggers “property damage” coverage and be prepared to actively negotiate the required coverage parameters when purchasing or claiming coverage. If you have any questions about your construction insurance, we recommend that you contact us an experienced construction lawyer.

This article was written by Ethan Hoogeveen, a summer associate at Lamson Dugan & Murray, LLP.

Breaking Story – Do you have insurance coverage for that?

The Latest News on Do you have insurance coverage for that?

Original Source:
Category – Construction

© 2022 - WordPress Theme by WPEnjoy