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Construction Defect Claims Handbook for Insurance, Risk Management, Construction/Design Professionals von Junfola, Joseph M. (eBook)

  • Erscheinungsdatum: 15.12.2014
  • Verlag: BookBaby
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Construction Defect Claims

Over the past 25 years or so, the property/casualty insurance industry has confronted an onslaught of construction defect claims. Since the construction sector is a critical component of our Gross Domestic Product, it is not surprising that the impact of construction defect claims on the economy is significant. In addition, the ubiquity of these claims negatively impacts the availability and affordability of insurance, particularly for new residential construction. Managing such claims is challenging given the number of parties involved and the variety of construction contract language dealing with, among other things, indemnity obligations and insurance requirements. Risk-transfer language can be complex and has been the subject of much litigation. This handbook provides a practical and user-friendly framework for those professionals who manage construction defects. It will assist the professional's continuing learning, critical to the professional's success, and it will provide a handy reference.


    Format: ePUB
    Kopierschutz: AdobeDRM
    Seitenzahl: 229
    Erscheinungsdatum: 15.12.2014
    Sprache: Englisch
    ISBN: 9781483543062
    Verlag: BookBaby
    Größe: 1047kBytes
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Construction Defect Claims

Chapter 1

What is a Construction Defect Claim?

Ahh, home crap home!

Walter Fielding, Jr.

The Money Pit, 1986

Universal Studios

What is a Construction Defect?

Before we address the construction defect claim, let's first explore the construction defect.

At the outset, it is important to realize that structures can fail for reasons other than construction and design defects:

...all buildings have an expected lifespan and even the structures of the ancient world will erode into a mound of sand given enough time. The eventual failure of a structure is an expected result rather than a manifestation of a construction defect. 13

While design and construction professionals can fail to meet standards of care resulting in construction defects and damages, structures are simply not built to last forever and neither are they required to be perfect in design and construction. The question, then, is whether the failure is due to normal wear and tear, the result of the expiration of the useful life of the structure, a maintenance problem, or one actually due to a construction and/or design defect. 14

Construction defects often are initially latent, with a later manifestation of symptoms of the defect. They can also be patent, that is, they are readily apparent. 15 This is important for a number of reasons including the impact on statutes of limitations and repose, and the "trigger of coverage", both of which will be covered later.


Construction defects can be defined by statute. For example, in Nevada, NRS 40.615 defines a constructional defect as...

...a defect in the design, construction, manufacture, repair or landscaping of a new residence, of an alteration of or an addition to an existing residence, or of an appurtenance. The term includes physical damage to the residence, an appurtenance or the real property to which the residence or appurtenance is affixed that is proximately caused by a constructional defect. 16

Florida's Chapter 558.002, defines a construction defect in this way:

...a deficiency in, or a deficiency arising out of, the design, specifications, surveying, planning, supervision, observation of construction, or construction, repair, alteration, or remodeling of a dwelling, any appurtenance to the dwelling, or the real property to which the dwelling or appurtenance is affixed resulting from:

(a) Defective material, products, or components used in the construction or remodeling;

(b) A violation of the applicable codes in effect at the time of construction or remodeling which gives rise to a cause of action pursuant to s.553.84;

(c) A failure of the design of a dwelling to meet the applicable professional standards of care at the time of governmental approval; or

(d) A failure to construct or remodel a dwelling in accordance with accepted trade standards for good and workmanlike construction at the time of construction. 17

A Working Definition

For our purposes, here is a working definition:

A "construction defect" can be defined as a failure of the construction to perform in an intended or expected way. This failure to perform can, but not necessarily, cause physical injury to the work itself and/or other property or work. "Construction defects" include defects in design, faulty work, defective building products/material, and various types of soil failure.

Design defects include:

Improper site selection
Building/system does not work as designed
Defective plans, specifications, selection of improper materials
Defective (physical) construction includes:

Faulty workmanship
Poor quality
Noncompliance with co

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