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Construction and Contractors

‘Right to Repair’ Statutes: the Fix to Construction Defect Litigation

“Right to Repair” In the United States More than thirty states have enacted legislation that requires homeowners to notify builders of claimed defects and to provide them with an opportunity to repair the defects before the owners initiate legal proceedings. These “right to repair” statutes are the legislatures’ response to the increased filing of time-consuming and expensive construction defect lawsuits. Right to repair statutes provide an avenue to avoid litigation whereby the builder can address the homeowner’s claimed defects and attempt to repair the defects and allow homeowners to seek repairs without having to file a lawsuit. In general, right… Read More »‘Right to Repair’ Statutes: the Fix to Construction Defect Litigation

3 Exposures to Consider on a Builder’s Risk Policy

3 Exposures to Consider on a Builder's Risk PolicyHard, Soft and Business Income Expenses

The resurrecting construction industry means that builder’s risk submission activity is on the rise. As such, it’s important to understand this line of business. Here’s an overview of some things to consider on a builder’s risk policy.

Construction contracts generally require the building owner or the contractor to purchase and maintain a builder’s risk policy. The policy provides coverage for loss or damage to the unfinished building’s construction materials on the work site during the course of construction, subject to certain restrictions and exclusions. The policy can also be extended to cover existing structures if the project is a renovation. Exposures are broken down into three general parts: hard costs, soft costs and business income or loss of rents.

Hard costs are the tangible assets that comprise the construction project; quite simply, the costs of material and labor associated with a project – also known as “sticks and bricks.”

Soft costs, also known as Delay in Opening Expenses, are usually covered and limited by special endorsements to builder’s risk property policy. Coverage is provided for additional construction
loan interest, real estate taxes, marketing and re-leasing expenses, administrative expenses, and architectural/engineering fees which are incurred as a result of a covered loss – one that causes delay in completion of a project. These expenses can be further broken down into two sub-categories: construction expense and additional soft costs.Read More »3 Exposures to Consider on a Builder’s Risk Policy

Businesses Hit Hardest by the Recession

According to Insurance Journal, that has contacted independed agents across the nation, the following is the list of businesses hit hardest by the recession: – Construction and related trades – Restaurants – Retailers – Printers – Manufacturers Contrary to that, there are industries that have picked up: – Grocery stores – please tend to buy food and cook more than go out – Cheap eateries – Hospitality business