Protecting Yourself In The Construction Industry

These days lawsuits over construction work are commonplace.  Spurred on by the lagging economy and the boom of track houses went up all through the 2000’s, people are looking to recoup some of the value of their homes.  Lots of homes were bought at very high values even though they were hastily constructed and low end materials were used, people who purchased these houses are going after the construction companies to fix issues that have become widespread many of which relate to faulty roofs, cracking walls, plumbing or electrical wiring.  Sadly many lawyers have seen this as a golden opportunity and are petitioning entire homeowners associations to go after the builders who put together their houses.  Most laws state that a contractor or seller is strictly liable for any defects.

General contractors and subcontractors are both at risk to be fined large amount of money.  Much of the time anyone involved in the building of the house is being sued even if they had nothing to do with the problems.  Although many of these cases are valid and homeowners who purchased defective products are owed at least the costs of repairs, this section of the law has become a phenomenon loaded with fraud. 

Although some states have put forth legislation to limit the amount damage that can be leveled against a flailing construction industry, consumer protection laws have often been used to stop the laws from passing.  It seems that some reform needs to be done but getting political figures to agree on the appropriate action seems far from reach.

In today’s world where suing is always the answer, general contractor liability insurance is especially important. To simplify matters most lawyers will come after the general contractor as their first order of business.  A homeowner is not going to go after each contractor separately, suing only the plumber or the roofer.  They will sue the general contractor who in turn will have to sue the subcontractors.  Legal bills can add up quickly and without general contractor liability insurance a contractor may become personally liable.

This type of case inevitably is long and drawn out with very large amounts of money at stake.  Once an insurance company is involved it usually negotiates with the lawyer for the person suing and settle on an agreement.  Both the lawyers fees, your and theirs, and the amount paid in damages are covered by the insurance company as long as it does not exceed the policy.

It is imperative to make sure that the company who issues the policy is adept at general contractor liability insurance.   If you are trying to cut costs and you under insure yourself then any damage amount that is over the coverage limit may come out of your pocket.  That’s a risk that is just not worth taking.


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