December 2008

Clearing up CGL confusion

Clearing up CGL confusion 5 stars5 stars5 stars5 stars5 stars

Is defective workmanship covered?

by Jared W. Heald and Stephen M. Phillips
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This is the second in a series of articles addressing commercial general liability insurance. The first article, "Are you covered?" was published in the October issue, page 48.

Although contractors have been purchasing commercial general liability (CGL) insurance policies for many years, confusion remains as to whether CGL insurance policies cover claims based on faulty or defective workmanship. The confusion is because language in CGL policies and overly broad statements in some court decisions overlook key factors in determining whether there is insurance coverage.

To help eliminate the confusion, you should know what to expect from your CGL insurance carrier when a claim alleging defective workmanship is made against your company.

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