Which Insurance Carrier Is Responsible For Damages On A Construction Project?

Understand that you may have changed insurance carriers during a construction project and there may be multiple sources of coverage depending on the type of loss and when the loss occurred

Insurance Post It Notes Freedigitalphotos

Originally published by Matthew DeVries on Best Practices Construction Law blog.

There are multiple types of insurance coverage for the various risks on a construction project. However, when there are multiple insurance carriers covering the same risk (i.e., general liability, builder’s risk, workers’ compensation, professional liability) over different periods of time, there may be a dispute as to which carrier covers the loss.

The court case of the Cincinnati Insurance Co. v. Motorists Mutual Insurance Co. addressed this very issue. There are a few take-aways from the decision as to which insurance carrier may be responsible for damages:

  1. A CGL policy generally provides for coverage during the policy period.
  2. There are different conclusions as to whether claims for defective work are covered, but most states say “no”.
  3. The duty to defend is definitely broader than the duty to indemnify.

(more about what construction contractors should take away from this court case...)