Complexities of Builder's Risk Insurance Claims: Navigating Defective Workmanship, Accidents, External Causes, Express Exclusions, and More

Construction projects are subject to accidents and catastrophic events that are typically costly and complicated and often result in extended battles over builder's risk insurance (BRI) coverage. It is crucial to determine whether there is builder's risk coverage for such accidents and events.

Many legal issues impact BRI recovery for construction accidents and events, in part due to the lack of use of a standard form BRI policy. Coverage is, therefore, sometimes dependent on subtle distinctions in BRI policy terms and language. This language needs to be reviewed and negotiated before shovels hit the ground.

Entities involved in construction projects, including owners, contractors, and insurance companies must understand critical issues such as defective workmanship, accidents, and external causes, the applicability of exclusions such as those for defective workmanship, exceptions to those exclusions, business interruption or soft costs coverage, as well as "other insurance" and priority of coverage arguments.

Listen as our authoritative panel of construction attorneys analyzes how to determine proper insurance coverage for construction accidents and what language considerations to include for specific provisions. The panel will discuss critical issues that impact potential recovery, including defective workmanship, accidents and external causes, express exclusions for defective workmanship, and the inherent vice and latent defect exclusion.

1. Ownership of policy
2. Amount of coverage
   • Property damage
   • Delay claims
     • Lost gross profits, loss of income, continuing expenses
3. Physical damage or loss vs. mere defective workmanship
4. Accidents and external causes
5. Express exclusions for defective workmanship
6. Inherent vice and latent defect exclusion

The panel will review these and other crucial issues:

• BRI policy structure and preferred coverages.
• Key exclusions, exceptions, and policy conditions.
• Interplay between BRI and commercial general liability coverages.
• Factors courts look at in determining whether a construction defect has caused physical damage or loss triggering BRI coverage
• How BRI policies treat ensuing lost gross profits, loss of income, and continuing expenses
• How claims by multiple insureds arising out of the same event or occurrence are treated