A Richmond, VA, resident, Claire C. Carr serves as the vice president and managing partner of Kalbaugh, Pfund & Messersmith, P.C. (KPM Law). Claire C. Carr possesses an extensive background in insurance defense litigation, and she has provided representation to insurance carriers and employers in workers’ compensation matters. In construction cases involving litigation, insurance carriers typically first experience disagreements regarding coverage. Conflicts concerning insured subcontractors is among the most common.
When it comes to subcontractors with a claim filed against them, many don’t know the extent of what is covered under their liability insurance. Contractor and subcontractor insurance usually provides coverage for property damage caused by an occurrence, which refers to the specified circumstances in which the damage is covered under the policy. However, subcontractors often misunderstand policy exclusions that prevent them from receiving coverage.
Understanding coverage exclusions is important. An opinion from the United States District Court for the Western District of Virginia provides a framework for examining this situation. In the ruling, the court found that damage caused by the subcontractor’s faulty work does not qualify as an occurrence because their policy specifically excluded coverage if contractual obligations with their contractor were not met. Moreover, the court also held that negligence does not constitute an occurrence that triggers coverage when a contactor includes negligence allegations in a breach of contract claim against the subcontractor. The court explained that negligence in such cases constitutes only a breach of duty.
