The observations that follow reflect insights gained during efforts over an extended time frame of handling insurance coverage questions, particularly during the life of construction defect claims. This is an update to the first part of this article, which was first published online in June 2009 by Claims Magazine.

This article continues the discussion of certain issues that arise on most construction projects, and how those issues can affect claim handling. This is not an article about how to handle every construction-defect issue that may ever arise on a particular project. The authors instead share the accumulated results of their combined efforts over many projects and many years, to obtain participation and contribution from other carriers toward settlement.

Digging for Data

Let’s begin with the assumption that the underlying tort claim is settled. The first illustration involves a typical situation: Your policyholder, the general contractor, worked with a claimant to construct a custom home. However, the home is built over an underground spring and structural damages manifest themselves.

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