The easiest way to avoid liability for construction defect claims is by preventing them altogether. However, since prevention of a claim is not always possible, it is important that adjusters take early steps upon receipt of a new construction defect claim in order to limit liability and ensure the most efficient expenditure of defense costs.

When does liability arise?

A construction defect generally occurs when a construction project either fails to conform to contractual requirements and specifications, or fails to comply with generally accepted principles governing the industry standards, resulting in damages. Whether your insured is an architect, builder or contractor, they can generally be held liable for negligence for failure to perform their duties consistent with the generally expected degree of competence that a reasonably skilled professional would exercise under similar conditions. Some of the common construction defect theories of liability include:

  • Quality of work issues