Sustainable Land Development Today - September 2007 - (Page 44)

RISK MANAGEMENT against builder-developers or suppliers of goods today do not merely allege damage to the work or products supplied by the builder-deveoper or its subcontractors. More important, the plaintiff’s exorbitant damage claim usually is not limited to the repair or replacement of the goods or services provided. Instead, plaintiffs routinely claim that because the builderdeveloper’s workmanship was flawed, the plaintiffs experienced damage to other property, incurred substantial loss of use expense, and incurred a host of other innovative damages. Under these circumstances, the insurer usually is required to provide a defense to the claim, and probably will be obligated to provide indemnity for some or all of the damages or settlement costs ultimately incurred. As a matter of practice, however, many insurers will try a broad-brush denial, citing the absence of third party proper- Meet intuitive technology. t BaySaver Technologies, our engineers are known for simplifying designs and throwing a little common sense into the mix to help solve your stormwater treatment problems. We call it “intuitive technology.” It’s the smartest people in the business using sound, practical judgment. It’s what makes our innovative new filter and our steady line of separators more efficient, economical, and easier to specify, install and maintain. A Maybe our BayFilter won’t be the prettiest piece of equipment on the truck, but when you learn more about what’s inside you’ll see exactly why we chose the word intuitive to describe it. Find out more about BayFilter and the entire line of BaySaver products. Go to baysaver.com to research, learn, specify, or just look around. VISIT BAYSAVER.COM OR CALL 800-BAYSAVER (800.229.7283) FOR MORE INFORMATION. Circle 159 • or www.LandDevelopmentToday.com/adinfo 44 September 2007 Sustainable Land Development Today ty damage. This type of denial can, and should, be challenged. To illustrate the point consider the following example: A builder-developer builds a new home development. Its subcontractor installs windows that are defective and result in water infiltrating the homes, causing damage to sheetrock, furniture, and rugs. Because the builder-developer’s alleged faulty work and product resulted in damage to property in addition to property supplied or worked on by the builderdeveloper, the general liability insurer would be held accountable in most courts for the costs associated with compensating the homeowners for repairing or replacing the sheetrock, furniture and rugs. Depending on the specific facts, the insurer’s obligation to pay may also extend to compensating the homeowners for their loss of use of this property. These damages likely will be far greater than the cost merely of replacing the defective windows. Likewise, the business risk exclusions, which are standard in most general liability policies, seek to establish that the insurer is not agreeing to function as the performance bond surety. Thus, the “your work,” “your product,” and “impaired property” exclusions bar coverage for claims that arise out of the work or products supplied by the builder-developer (or, in many cases, its subcontractors). The business risk exclusion analysis is not substantively different from the no occurrence argument. If there is damage to property other than the builder-developer’s work itself, it is likely that there was an insured occurrence and the business risk exclusions should not apply. The bottom line is that coverage must be made available whenever the builder-developer is sued for damages that extend beyond the work or products that it supplied for the project. Therefore, it is critically important to understand the nature of the plaintiff’s claim and its alleged damages. In some cases, the builder-developer’s work or product may be incorporated into a larger aspect of a project, which causes damage to other component parts of the overall project. Again, http://baysaver.com http://BAYSAVER.COM http://BAYSAVER.COM http://www.LandDevelopmentToday.com/adinfo

Table of Contents Feed for the Digital Edition of Sustainable Land Development Today - September 2007

Sustainable Land Development Today - September 2007 Contents Our Voice: Teaching and Learning Your Voice: Reader Response Editorial Board A 52-Mile Taking Fiber to the Front Doors of America Educators Incorporating Sustainability Land Planning: The Truth about Sprawl Irrigation: Communication Key Wastewater: Many Challenges Determine Sewer Options Regulation: Changing by State, Region, and Municipality Risk Management: Construction Defect Claims Recommended Reading Products/Services Showcase Advertiser Index Calendar Classifieds The Last Word

Sustainable Land Development Today - September 2007

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