What is a construction defect and can your business be held responsible for one?
As a contractor or construction professional, you know that you are subject to certain liability risks. While having the right contractor general liability insurance can help you protect against these risks, you should still understand the threats that your business faces. For instance, lawsuits related to construction defects are common in the industry. But what exactly is a construction defect and how can your business be held liable for these issues? Here’s what you need to know about construction defects.
What is a Construction Defect?
A construction defect is a flaw in a building that stems from mistakes made during the design or construction process. For instance, defects often reveal themselves in construction documents, such as a miscalculation in an architect’s designs. Construction defects can be divided into two categories: patent and latent. Patent defects are obvious problems, such a crack in a building’s foundation. Latent defects refer to issues that are hidden from plain view. Oftentimes these defects are not discovered until years after the construction project was completed.
Who is Held Liable for Construction Defects?
Unfortunately, anyone who works on a construction project can be held responsible for a construction defect if a customer decides to sue. While construction teams and designers can claim that the issues stem from improper maintenance, if you are legally held liable, then you might be on the hook for millions of dollars in repair and settlement costs.
How Can I Protect Myself?
The completed products and operations coverage included in your business’s general liability insurance policy will address liability issues such as the ones related to construction defects. In this case, your insurance will likely provide coverage for your business’s legal representation, defense, and potential settlement costs.
As construction defect liability claims can be extremely costly, it’s important to make sure you have the right contractor general liability insurance protection in place. For assistance with your business’s insurance needs, contact the experts at Artisan Insurance Solutions. We are ready to get you covered today.