Does Orlando Contractors Liability Cover Building Defects?

Newman Crane

Does Orlando Contractors Liability Cover Building Defects?

The debate over whether or not general liability covers construction defects is one of the most polarizing in the insurance industry. For years, contractors have sought reimbursement from their insurers for legal fees, settlements and other costs of faulty building claims only to have their insurance providers argue that defects are not coverable “occurrences” under and Commercial General Liability (CGL) policy. However, in the last few years, local and state courts have seen increasing number of construction default cases and disputes from contractors seeking legal intervention.

Standard general liability insurance policies provide coverage for many incidents and allegations of property damage caused by what many commercial policies define as an “occurrence.” As such, the term “occurrence” is generally defined as an accidental exposure to harmful conditions. For example should a contractor’s equipment accidentally damage a homeowner’s property not associated with the job at hand, general liability would help cover the contractor’s expenses to replace or reimburse the homeowners for their damaged property. The situation above was clearly an accidental damage of the homeowner’s property, however construction defects have historically been seen by insurance providers as a fault in the job performance of the contractor and would therefore not be covered by general liability. However, courts are increasingly concluding that defective construction is in fact an accidental occurrence and would therefore qualify as a protected peril under a contractor’s general liability policy.

The Supreme Court of Florida, along with the courts of Alaska, Wisconsin, South Dakota, Mississippi, Georgia, Texas, Tennessee, Indiana, South Carolina, Minnesota and Kansas have ruled and maintain that construction defects are in fact insurable occurrences under a contractor’s general liability coverage. A few states including Colorado, Arkansas, Hawaii and more have even passed legislative statutes that mandate that construction defects be viewed as and included as covered perils for contractors in their general liability policy.

Even still the debate can be lengthy and resource consuming, which is why having strong coverage is a huge benefit for any Florida contractor. When it comes to protecting yourself against allegations of contractor default, there are a number of options available to Orlando contractors. At Newman Crane, we specialize in helping Central Florida contractors find complete business insurance solutions at affordable rates. Our Construction insurance programs are designed to help contractors minimize their losses and protect their assets. We offer general liability, professional liability and many other Orlando Contractors Liability solutions. We invite you to contact us today at to learn more about our policies and see for yourself why Newman Crane is one of the primer insurance companies in Orlando.