Defective Construction Coverage Frustrates Policyholders
In the world of commercial general liability, policyholders have been frustrated over whether commercial general liability policies cover faulty construction work.

December 09, 2011 /24-7PressRelease/ -- Defective Construction Coverage Frustrates Policyholders

When a homeowner or property owner identifies a construction defect in the home or building he or she owns, the homeowner or property owner looks to the builder for compensation. The builder turns to their insurance policy to determine whether the policy covers the defect. In the world of commercial general liability, policyholders have been frustrated over whether commercial general liability policies cover faulty construction work.

This issue is important to homeowners in Colorado. If a homeowner discovers a valid construction defect in their home, they deserve fair compensation and commercial insurance policies cover builders when something goes awry. In addition, the Colorado Legislature recently passed new legislation on the issue.

Confusion Over Construction Defect Claims

Builders look to their commercial general liability insurance policy when an issue arises. One long-standing and frustrating issue is whether a builder's commercial general liability insurance will cover construction defect claims. Construction defect claims are defined as damages that result from poor or faulty work.

The language within the commercial general liability insurance policy is supposed to govern whether construction defect claims will be covered; however, jurisdictions across the United States interpret the language of the policy differently. The result is that different courts come to different conclusions. The different conclusions cause a disparity in coverage and builders are left with the uncertainty of whether their policy will cover them. The issue is especially frustrating for contractors who build in multiple states because a court ruling in one state may rule in favor of the policy whereas another court in a different state may not.

The general trend in the courts is to find that construction defects are covered by commercial general liability insurance policies, but four states have passed specific legislation to more clearly address the issue. One of those states is Colorado.

Faulty Construction Work in Colorado

Colorado's state legislature passed legislation that generally says faulty construction work falls under a commercial general liability policy. Because of the legislature's work, the legislature has taken the issue out of the courts. Experts say the new law may provide some support to the construction industry, which has been central in the economies of many states. Experts also believe that other states will follow Colorado's lead to address the issue and resolve it through new law. Hopefully, the law will also help ensure that homeowners who suffer construction defects in their homes have the chance to be properly compensated.

If you are a homeowner in Colorado and believe your house has a construction defect, contact an experienced construction law attorney to explore your legal options.

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