Will my insurance cover claims for defective work?

Alex BarthetDefective Work

You might assume your insurance (typically your commercial general liability insurance) will cover claims for your defective work.  Unfortunately, this is not always true.

Your general liability insurance is intended to protect you for claims that cause damage to other property. Other properties in this case refer to property separate and apart from your work. For instance, if you are painting a building and paint falls on the car down the street, your insurance will likely cover the repair of the car that got splattered. Conversely, if you are installing windows and the windows were installed improperly causing water damage in the building, your insurance may cover the water damage inside the building. But it won’t cover your claims for defective work as to the windows or the installation of the windows themselves. In many cases where there are claims for defective work, they always have two components – the damage to other property (in some cases that’s very large and in other cases it’s very small) and the damage or the replacement and repair of the defective work (again, sometimes that can be small or large).

What’s important for you to understand is what your insurance actually covers and what it doesn’t. This way you can deal with claims that may be asserted against you for defective work. Some clients come to our office with a claim which they think incorrectly can be lodged against their insurance. They believe that since they are insured, everything should be covered under their insurance. That’s just not the case. Every policy is different, each has limitations and exclusions, so read your policy and speak to your agent.