Courts may alter liability for construction defects

Miami /
Oct.October 04, 2015 04:00 PM

Two recent court decisions appear to expand property insurance coverage for defective construction work.

The U.S. Court of Appeals for the Eleventh Circuit broadened the definition of covered property damage in the case of Carithers v. Mid-Continent Casualty. The court held that demolition necessary to repair defective construction is property damage covered by insurance.

In previous court decisions, such repair and replacement expense were deemed uncovered property damage.

In the case of Essex Insurance v. Kart Construction, the U.S. District Court for the Middle District of Florida found that exclusions to property insurance coverage during construction work were inapplicable.

The Middle District of Florida relied on a decision by the Fifth District Court of Appeals in a case involving a swimming pool drained for tile repairs.

The appellate court rejected an argument by the property insurer that a policy exclusion limited covered damage to the tiles the contractor was standing on when the swimming pool unexpectedly popped out of the ground after it was drained. [Daily Business Review] — Mike Seemuth


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