{"id":893645,"date":"2018-02-21T15:05:17","date_gmt":"2018-02-21T22:05:17","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893645"},"modified":"2018-02-21T15:05:17","modified_gmt":"2018-02-21T22:05:17","slug":"contractors-consult-insurance-broker-regarding-cgl-policy","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/contractors-consult-insurance-broker-regarding-cgl-policy\/","title":{"rendered":"Contractors: Consult Your Insurance Broker Regarding Your CGL Policy"},"content":{"rendered":"<p>David Adelstein | <a href=\"http:\/\/www.floridaconstructionlegalupdates.com\/contractors-consult-your-insurance-broker-regarding-your-cgl-policy\/\" target=\"_blank\">Florida Construction Legal Updates<\/a> | February 10, 2018<\/p>\n<p>Contractors:\u00a0 do yourself a favor and consult your insurance broker regarding your commercial general liability (CGL) policy.\u00a0\u00a0 Do this now, especially if you subcontract out work.<\/p>\n<p>CGL policies contain a\u00a0<strong>\u201cyour work\u201d\u00a0exclusion<\/strong>.\u00a0 The CGL policy is written such that it\u00a0excludes\u00a0\u201c\u2018<strong>property damage\u2019 to \u2018your work\u2019 arising out of it or any part of it and included in the \u2018products-completed operations hazard.\u2019<\/strong>\u201d This exclusion will be raised in the post-completion\u00a0<strong>latent construction defect\u00a0<\/strong>scenario. (There are other exclusions that will be raised to a defect discovered during construction.)\u00a0 Certain policies will contain a\u00a0<strong>subcontractor exception<\/strong>\u00a0to this \u201cyour work\u201d exclusion.\u00a0 You WANT this exception- no doubt about it so that this exclusion does not apply to work performed by your subcontractors.\u00a0 Without this subcontractor exception, truth be told, this \u201cyour work\u201d exclusion is a total back-breaker to contractors.\u00a0\u00a0 It will give your insurer an immediate out for\u00a0many\u00a0latent defect property scenarios since excluded from coverage is property damage to your work\u00a0including work performed by your subcontractors.<\/p>\n<p>In a recent opinion,\u00a0<i>Mid-Continent Casualty Co. v. JWN Construction, Inc<\/i>., 2018 WL 783102 (S.D.Fla. 2018), an owner discovered water intrusion and damage at his property.\u00a0 He sued the general contractor and the general contractor\u2019s insurer filed a separate action for\u00a0declaratory relief\u00a0claiming it had NO duty to defend or indemnify its insured\u2014the general contractor\u2014in the underlying suit.\u00a0 The court agreed because the contractor did not have the subcontractor exception to the \u201cyour work\u201d exclusion.<\/p>\n<p><strong>If work was performed by JWN [contractor] or on JWN\u2019s behalf-here by a subcontractor-then the \u201cyour work\u201d exclusion applies.\u00a0 Historically, insurers could be liable under commercial general liabilities policies resembling the policy in the instant case for certain types of damages caused by subcontractors\u2026.Nonetheless, insurers do possess the right to define their coverage as excluding damages arising out of a subcontractor\u2019s defective work by\u00a0eliminating subcontractor\u2019s exceptions from the policy.\u00a0An insurer is only liable for a subcontractor\u2019s defective work when the \u201cyour work\u201d exclusion does not eliminate coverage for work performed by a subcontractor\u2026.In conclusion, the insurance policy in this case excluded coverage for work performed not only by JWN, but also by JWN\u2019s subcontractors.<\/strong><\/p>\n<p><strong><i>JWN Construction, Inc., supra<\/i>, at *4.<\/strong><\/p>\n<p>This ruling meant that the general contractor\u2019s CGL insurer had no duty to defend or indemnify its insured\u2014again, the contractor\u2014for the defects or resulting water damage. \u00a0A total killer illustrating the absolute importance of the\u00a0subcontractor exception to the \u201cyour work\u201d exclusion\u00a0in your CGL policy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Adelstein | Florida Construction Legal Updates | February 10, 2018 Contractors:\u00a0 do yourself a favor and consult your insurance broker regarding your commercial general liability (CGL) policy.\u00a0\u00a0 Do this now, especially if you subcontract out work. CGL policies contain a\u00a0\u201cyour work\u201d\u00a0exclusion.\u00a0 The CGL policy is written such that it\u00a0excludes\u00a0\u201c\u2018property damage\u2019 to \u2018your work\u2019 arising&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/contractors-consult-insurance-broker-regarding-cgl-policy\/\">Continue reading <span class=\"screen-reader-text\">Contractors: Consult Your Insurance Broker Regarding Your CGL Policy<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[30,9721],"tags":[7757,9895,392,4739,56],"class_list":["post-893645","post","type-post","status-publish","format-standard","hentry","category-general-liability-policy","category-property-damage","tag-your-work-exclusion","tag-advise-consult","tag-cgl-policy","tag-commercial-general-liability-policy","tag-property-damage","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Contractors: Consult Your Insurance Broker Regarding Your CGL Policy - Advise &amp; 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