The question of whether and when a contractor can obtain insurance coverage for damage caused by a subcontractor’s faulty work has been fought out in a state-by-state basis in courts across the country.
In July, the New Jersey Appellate Division and the 3rd Circuit each addressed this issue. The Appellate Division came out strongly for coverage in Cypress Point Condominium Association, Inc. v. Adria Towers, L.L.C. No. A-2767-13T1, __ N.J. Super. __ (App. Div. July 9, 2015). The 3rd Circuit, in The Travelers Property Casualty Company of America v. USA Container Co. No. 14-3685 (3d Cir. July 10, 2015), moderated its past strong rejection of coverage for subcontractors’ faulty work, certifying the question to the New Jersey Supreme Court while acknowledging that various jurisdictions have reached very different decisions on this question. If the New Jersey Supreme Court finds coverage, it could help tip the balance nationally on this highly contested issue.
To read the full article: Insurance Coverage for Subcontractors' Faulty Work