Category: Insurance

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Insurers Attempt to Avoid Coverage (Mis)using the Professional Services Endorsement

Parties spend significant time negotiating insurance provisions for protection in the event they face claims related to defective construction, but those protections can be rendered worthless if the wrong insurance forms are used.  In my recent Daily Journal of Commerce article, I look at one particularly troublesome provision – the “professional services” endorsement – and … Continue Reading

Buyer Beware: Oregon Courts Will Enforce Anti-Assignment Provisions in Insurance Policies

An anti-assignment provision in an insurance policy may prohibit the insured from assigning its rights under the policy. In my latest DJC article, I discuss a recent decision by the Oregon Court of Appeals, in which a claimant learned the hard way that Oregon courts will not hesitate to enforce an anti-assignment provision in an … Continue Reading

The Devil is in the Details: Contractual Additional Insured Requirements

Owners frequently require their contractors to name them as additional insureds. Owners and contractors often include requirements seeking to have the obligation to name them as additional insureds “flow down” to parties with whom they lack a direct contractual relationship (e.g., subconsultants, subcontractors, and suppliers).  Despite the simplicity and appeal of this arrangement, contractual additional … Continue Reading

Is Late Notice A Big Deal? Ninth Circuit Asks For An Opinion From CA Supreme Court On Insurance Question

So, what’s the big deal if you’re a little “late” in giving your insurer notice of the claim or lawsuit against your company?  That’s the question, albeit in essence, that the Ninth Circuit has posed to the California Supreme Court recently in an Order Certifying Questions, Pitzer College v. Indian Harbor Insurance Co. Specifically, the … Continue Reading

Year-End Insurance Review: Common Coverage Oversights

Carrying adequate insurance on construction projects is a critical aspect of risk management for developers, builders and designers. But it’s a complicated and time-consuming subject, and if you haven’t slogged through the complexity of the details in policies, you may be vulnerable to unintended consequences. In my recent article for the Daily Journal of Commerce, … Continue Reading

One Unanticipated Cost of Being an Owner-Builder in California: Liability for Retained Control over Safety

Many times I hear from people who want to “save money” and serve as their own “owner-builder” under the exemption to the California Contractor’s Licensing law, which generally requires that any “construction” work over $500 to be performed by a licensed California contractor in the absence of an exemption.  (Bus. & Prof. Code section 7048).  … Continue Reading

“All Risk” Coverage Is Not Equal to “All Loss” Coverage Under Customary Provisions in California Builder’s Risk Policies

A common insurance question asked by our owner/developer clients when they discover that their completed project has defects is whether their own insurance will cover the cost to fix the defect or any damage from the defect.  While trying hard not to sound like the proverbial lawyer, we often have to say “it depends.”  What … Continue Reading

On Guard: A Look at Subcontractor Default Insurance

Whether you call it SDI or SubGuard, subcontractor default insurance is yet another consideration for public and private project owners as they look at protection from subcontractor default.  But what exactly is this relatively new option and when is it most appropriate?  In my recent article for the Daily Journal of Commerce, I discuss SDI, … Continue Reading

No Crane Trespassing! Swingway Easements Make Good Neighbors

Earlier this year, my colleague Eric Grasberger authored a blog post about a crane collapse in Lower Manhattan.  In that post, he mentioned that neighboring landowners may seek to prevent cranes from intruding into the airspace above their property.  Contractors and owners alike are often surprised to learn that a crane swinging over adjacent property … Continue Reading

NYC Crane Collapse Likely to Fuel Crane Objections and Easements

On Friday, February 5, one man died and three were injured when a 565-foot crane toppled in gusty winds in lower Manhattan, not far from the World Trade Center. The investigation will likely take weeks to months as experts try to reconstruct whether the engineering, erection, operation or manufacture of the crane, or some combination … Continue Reading

Finishing Strong vs. Finishing Wrong: Tips & Traps for Project Completion

Complex construction projects carry complex problems as they approach completion. In my recent article for the Daily Journal of Commerce, I address 10 potential pitfalls that owners, contractors and design professionals may encounter, and I offer tips to help you prepare for them. Read the full article here. “Finishing Strong vs. Finishing Wrong: Tips & … Continue Reading

Insurance Coverage Decision a Major Victory for the Construction Industry

My partner, Scott Kaplan,  discusses the recent Oregon Court of Appeals in FountainCourt Homeowners’ Ass’n v. FountainCourt Development, LLC case in the Daily Journal of Commerce.  On August 6, the Oregon Court of Appearls, handed down a decision making clear that standard form liability insurance policies cover construction defect claims so long any “property damage” for … Continue Reading

No Duty By Insurer: Affirmation That There Must Be Damage To Other Property, Not Just Defective Workmanship In CA

California has held for at least a decade that in order for there to be insurance coverage under a standard Comprehensive General Liability for a claim arising out of a construction project, including a duty to defend by the insurer, there must be damage to other property, not solely to the property on which the … Continue Reading

Do You Understand all that Insurance Jargon in Contract?

In my latest Daily Journal of Commerce Construction column, I discuss insurance jargon in contracts and use Commercial General Liability or “CGL” policies as an example.  The terms “bodily injury,” “personal or advertising injury,” and “property damage” all have specific meanings in CGL policies.  Since this language is not always intuitive, it is best to … Continue Reading

Multi-Family Sellers Beware: Don’t “Alienate” Your Project from Insurance Coverage for Construction Defects

The apartment business is booming right now. Unfortunately, construction defects persist as well, particularly in garden-style and wood-framed construction. Most developers are savvy enough to maintain a good insurance program, but many do not understand (until too late) that the policies they bought may not cover the risk of construction defects.  As an owner-developer, neither your property … Continue Reading

Owners: Watch Out for New Endorsements

The new year brings a reminder that owners need to be careful about changes to their contractors’ and designers’ insurance policies. Many of the most important terms of an insurance policy are in “endorsements” added to the policy. For example, a policy may include an endorsement excluding claims between insured parties (say, a claim by … Continue Reading

Bah Humbug: California Supreme Court Won’t Hear Dispute Arising From Overbroad SB800 Decision

You may have recently heard that on December 11, 2013, the California Supreme Court denied the builder’s Petition for Review of the published decision in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove LLC, 163 Cal. Rptr. 3d 600, Cal. App. 4th 98 (2013). For builders and contractors, this is very frustrating news and undermines the … Continue Reading

Utah Reverses Course on Apportioning Costs of Defense to Policyholders

 A recent Utah Supreme Court decision could result in significant benefits to some policyholders in Utah’s construction industry. The case, Ohio Casualty Insurance Co. v. Unigard Insurance Co., 2012 UT 1, concerned a fight between two insurers about how to split the costs of defending a lawsuit brought against their policyholder, Cloud Nine. For policyholders, the most … Continue Reading

The Increasing Importance of Performance Bonds

There are now 25 states in the U.S. that hold that construction defects are not an “occurrence” and are therefore not covered under commercial general liability policies insuring contractors.  Couple this troubling statistic with the ever increasing number of policy exclusions and limitations, and we begin to realize that in many situations the contractor’s insurance … Continue Reading

Bond. Performance Bond.

Performance bonds—insurance-like arrangements in which a surety (the bonding company) contractually agrees to pay for the performance of a principal (the contractor) to an obligee (the owner) in case the principal fails to perform the obligations of its contract—should be used more often in construction agreements to provide owners with a source of funds to … Continue Reading

A Rose by any Other Name…. But Are You Really Insured?

Do you think you have adequate insurance protection for your project under an “additional insured endorsement” to another entity’s policy? Or through a “wrap” policy, known as either an Owner’s Controlled Insurance Policy (OCIP) or Contractor’s Controlled Insurance Policy (CCIP), because you are listed as “an insured”? Perhaps not under more recent policies. Check the … Continue Reading

You Are a Project Owner or Developer Who Wants to Build a Green Project? So, What Do You Actually Put in Your Contracts?

Despite the explosion of articles, seminars and webinars on green building and development during the last year or so, there is a dearth of information in the development world regarding what project owners and developers who do want to build a green project should actually put in their design and construction contracts. Here is what … Continue Reading
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