A Video Explaining Construction Defects and Insurance

The Defects

Construction defects are any deficiencies in the performance or completion of the design, planning, supervision, inspection, or construction for any new building or structure that has been remodeled or undergone repairs.

Understanding what a construction defect is has become so complex that states have begun to define them by statute. For example, construction defects are defined as a “violation of statutory performance standards for every building component in a dwelling” for any new residential construction sold after January 1, 2003, in California. [California Civil Code § 895 et seq. “Right to Repair Law” gives the builder the opportunity to repair or cure a defect before a suit is initiated.}

Under Illinois law, it is well-established that a construction defect is not an “occurrence” or “accident”; rather, it is the natural and ordinary consequence of poor workmanship. [ Lyerla v. AMCO Ins. Co., 536 F.3d 684, 689-90 (7th Cir. 2008), Allied Property & Casualty v. Metro North Condominium Association, USDC, N.D. Illinois, 2016 WL 1270480 (3/31/16)].

Since almost anything in a construction project can go wrong, this chapter will only deal with the kinds of construction defects that have caused, and will continue to cause, major damage to property and serious problems for occupants of structures.

Courts across North America have recognized the following major, albeit not all-inclusive, construction defect categories: Design Deficiencies, Material Deficiencies, Construction Deficiencies, Building Code Violations, and Subsurface or Geotechnical Problems.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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