The New Jersey Supreme Court recently reversed its position on coverage for construction defects, affirming the Appellate Division’s decision that consequential damages caused by a subcontractor’s faulty workmanship constituted “property damage” caused by an “occurrence” under the plain language of the developer’s Commercial General Liability (CGL) policy.
Topics: Claims Management, Commercial General Liability Coverage, Commercial General Liability Insurance Risk, Construction Project Risk, NJ Supreme Court Cypress Pointe v Adria Towers, Real Estate, Real Estate & Development General Liability, Real Estate & Development Risk Management, Risk management, Risk Management Blog
A case in point is the super sleek and very expensive Millennium Towers building in San Francisco. According to reports from independent consultants, the 58 story building has sunk about 16 inches and tilts about two inches to the Northwest. Settling is a natural process in any construction project and architects and engineers build that into their model; however, 16 inches since 2008 is a cause for concern. And, the sinking isn’t over. According to the August 9th article in Curbed San Francisco, the building is predicted to drop an additional eight to 15 inches into the ground.
The global outbreak of the Ebola virus not only has long term social ramifications but economic ones as well. Recently, this issue has become more and more prevalent on construction projects in developing nations. When a local government considers a substantial construction project it is expecting certain economic outcomes to follow. In light of the Ebola crisis, risk managers of construction companies and material supply companies must now factor into their budgets the real likelihood of a project being delayed or shut down even after a substantial amount of funds have been expended. A recent WSJ article, "Mining Projects Take Hit From Ebola Crisis", spoke about how major mining efforts have come to a virtual halt in the regions where Ebola is most prevalent. Work is now being disrupted by contractors pulling out of the area. This could lead to a variety of claims being filed – which may or may not be covered.