Construction professionals in New York face new hurdles in ensuring they are covered as additional insureds under other parties’ commercial general liability insurance policies.

In 2002, a New York City agency contracted with a general contractor and a construction manager to construct a forensic laboratory. The owner’s contract with the GC required that the GC obtain general liability insurance for the project containing an endorsement naming the owner and the construction manager as additional insureds.

Four years later, the owner sued the GC and the project architect, claiming they negligently damaged the excavation support system. In 2010, the architect commenced a third-party action against the construction manager, which promptly notified its insurance carrier seeking defense and indemnity under the GC’s policy. The carrier refused, and in 2012, the construction manager filed a lawsuit, arguing that it indeed qualified for coverage.


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The Ohio Supreme Court’s October 9, 2018 decision in Ohio Northern University v. Charles Construction Services, Inc., 2018-Ohio-4057 issued a blow to general contractors attempting to obtain insurance coverage under their commercial general liability (CGL) policies for property damage caused by their subcontractor’s faulty work. The Ohio Supreme Court held that faulty work is not “accidental” or “fortuitous,” as contemplated within the policy’s definition of an “occurrence,” and found that the general contractor had no coverage under its CGL policy.

Ohio Northern University (University) sued the general contractor, Charles Construction Services, Inc. (CCS) arising out of a contract to build a luxury hotel and conference center (Project) on the University’s campus. After completion of the Project, the University discovered extensive water damage from hidden leaks and other serious structural defects that it believed were caused by the defective work of CCS and its subcontractors. In response to the University filing suit, CCS sought coverage under its CGL policy, relying on the products/completed operations (PCO) coverage available for claims involving property damage caused by the faulty work of a subcontractor.


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Are you a construction company owner, CFO, controller, or lead estimator involved in the bidding process?

On October 13th, join construction industry leaders, Bill Burke, Jason Copley, David Kane, and Anthony Stagliano, for a hands-on seminar, providing insights into effective strategies to maximize your profitability through innovative insurance, surety, legal, and accounting perspectives.

To register, contact Olivia Kornilowicz at 215.564.1700 or opk@cohenseglias.com.


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[Note from the Editor: Due to an inadvertent editing error, omitted from our post entitled NJ Supreme Court Gets It Right! Consequential Damages Caused By A Subcontractor’s Defective Construction Work Is Insured was the fact that the property damage at issue occurred after the project was completed.  The insurance coverage at issue in the case was completed operations coverage included in the commercial general liability form.  The corrected article appears below.] 

Consultant presenting insurance concept and risk managementThe New Jersey Supreme Court’s August 4, 2016 decision in Cypress Point Condominium Association, Inc. v. Adria Towers, LLC opened the door for general contractors to obtain insurance coverage under their commercial general liability (CGL) policies for property damage caused by their subcontractor’s defective work after the project was completed.
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As members of the construction industry know, to describe the relationship between a surety and the party to whom it issues a surety bond (the principal) as confusing would be an understatement.  In fact, many believe that the surety-principal relationship is similar, if not identical, to the insurer-insured relationship. In a recent federal court opinion

For most people, there is only one thing more excruciating than a discussion about insurance coverage: a blog post about it.  So brace yourselves dear readers.

With all kidding aside, the importance for contractors and owners to understand the ins and outs of their insurance policies, and the risk transfer mechanisms that they are using,

As commercial property owners and their tenants assess the damage caused by Hurricane Sandy, they need to understand their rights and obligations under leases, mortgage loan documents, and insurance policies.

LEASE PROVISIONS

As a result of storm damage, many buildings were temporarily uninhabitable or sustained such significant damage as to be uninhabitable or untenantable for

Recent Pennsylvania court decisions have virtually eliminated any insurance coverage under commercial general liability policies for claims brought against general contractors arising from the faulty workmanship of their subcontractors.

Construction Executive.pngJonathan A. Cass, partner with Cohen Seglias Pallas Greenhall & Furman, PC, recently co-authored an article with Peter Stoll, Jr. and Mary Stoll Walter of