Sustainable Land Development Today - September 2007 - (Page 45)

in these circumstances, the insurer should be required to provide coverage because third party property damage has taken place. However, in the vast majority of cases, insurers will not delve deeply into understanding the precise facts of the asserted claim unless and until the builder-developer — or its coverage counsel — demand it. In this regard, it is also important to know that insurers have a continuing obligation to evaluate their coverage obligation for claims. Sometimes, the plaintiff’s complaint does not make clear that the claim involves more than a defective product or faulty work supplied by the builder. Rather, that information may be developed when: (a) interrogatories are served in the litigation; (b) depositions take place; or (c) expert reports are exchanged. Under these circumstances, the builder-developer or its coverage counsel needs to supply that information to the insurer so that the claim may be reviewed. A coverage denial is always subject to reversal upon the presentation of new facts. Another insurer-favorite hurdle to obtaining coverage for construction defect claims is the other insurance argument. When the claim is initially presented, the insurer will seek to gather information about insurance that may be available from other parties connected to the project — the owner, the builder-developer’s subcontractors, the architect, etc. The purpose of this information gathering effort is to put the insurer in the position to argue that coverage should be made available under any policy except the one that it issued to the builder. Nearly all general liability policies contain another insurance clause which seeks to address priority of payment when overlapping coverage is available. The trouble is that all of the other potentially applicable insurance policies in the mix on a particular claim contain a substantially similar other insurance provision, which seeks to establish primary coverage elsewhere. Under these circumstances, builder-developers should feel hamstrung. In a litigation setting, when courts are presented with this scenario, the majority rule is to require all insurers to contribute to payment of the loss – either on a pro rata or proportional basis. Again, skilled coverage counsel can work with the insurers to break through the other insurance logjam. There little doubt that construction defect claims present a myriad of complex and difficult coverage questions. However, the obstacles to coverage often are not insurmountable. Insurance coverage is attainable for construction defect litigation but a complete and comprehensive understanding of the facts is critical. SLDT About the author: Ms. Bennett is a Partner with the law firm of Robertson Freilich Bruno & Cohen, LLC. Her practice is focused on complex commercial litigation, with an emphasis on representing policyholders in insurance coverage dispute. She is a frequent author and lecturer on emerging insurance issues. Ms. Bennett may be reached at lbennett@rfbclaw.com Introducing Mud Mats A NEW revolutionary product to keep you out of the mud! EASY TO DEPLOY ALTERNATIVE TO ROCK ENTRANCES PROTECTING TURF SITE ACCESS For more information about Mud Mats please email us at: MudMats@brockwhite.com www.brockwhite.com Circle 199 • or www.LandDevelopmentToday.com/adinfo www.LandDevelopmentToday.com 45 http://www.brockwhite.com http://www.brockwhite.com http://www.LandDevelopmentToday.com/adinfo http://www.LandDevelopmentToday.com

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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