It’s an all-too-frequent fact pattern: construction contractors or subcontractors perform allegedly defective work on a building construction project, resulting in damage not only to the work itself but other aspects of the building. The owner (often an innocent homeowner) has a damaged building; the developer has an unsatisfied owner and looks to its construction contractors; and the contractors and subcontractors are subject to claims and lawsuits, but have little financial capability to address the problems and damages, much less defend against any owner- or developer-filed claims and lawsuits.
Can the contractors or subcontractors look to their commercial general liability (CGL) insurance for defense or indemnification? At least in Pennsylvania, the contractors’ and subcontractors’ insurance companies apparently have little to no legal obligation to participate in the defense or indemnification of the claims.
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