Faulty Work & Claims Reporting

Posted by Albert Sica on Mar 6, 2019 10:22:10 AM

faulty work and claims reporting

I came across an interesting case that illustrates how critical it is to properly notice a “downstream party” of a claim (or potential claim) and require proof that notice was filed with their insurer.

It is not uncommon to have a dispute with a vendor or contractor that, if not cured, would result in a lawsuit. Most professional liability policies have a “claims made and reported” trigger. If the claim is not made and reported within the policy period, the policy can deny coverage. This was the situation with Gateway Residences at Exchange LLC according to the article in Business Insurance.   To make matters worse, the contractor then went out of business and did not renew their coverage or buy a “tail”. 

This also underscores the need for a strong insurance compliance program so you always have current proof of insurance. When you have a serious dispute, it is advisable to send formal notice of that dispute to the vendor and, either require that they notice their insurer and provide proof or the insured notice the vendors insurer directly with proof of receipt. 

We are happy to answer any questions you may have on claims procedures or the framework of a strong vendor insurance compliance program.

The ALS Group

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