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What is a ‘Damage To Your Work’ exclusion?

On Behalf of | Aug 16, 2019 | Construction Law

It’s essential to a contractor’s business model to subcontract work to other local builders. No single contractor can manage to wear all the hats that are demanded on a busy home construction site.

So, what happens when flaws in a subcontractor’s work allegedly cause damage to the property? Who bears the liability for any ensuing claims?

Typically, whenever a construction claim arises, it’s the general contractor who first gets served with the complaint or petition for damages. That’s likely because the homeowner may not know or remember all of the separate subs who worked on the project.

But when the sole focus of the claim centers around the work of a subcontractor and the purportedly defective work did not damage the other areas of the home, most claims can then get passed onto the errant subcontractor who caused the damage.

Most general liability policies include “Damage To Your Work” exclusions regarding claims of alleged construction defects. It may contain a clause like:

“This insurance does not apply to: ‘Property damage’ to ‘your work’ arising out of it or any part of it and included In the ‘products-completed operations hazard’. This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.”

What that clause does is redirect the liability to the party who was the cause of the homeowner’s damage. The next step will likely be approaching the relevant sub to ask them to submit the claim to their own insurance company.

Alternatively, the general contractor could tender the claim to the general liability insurer for the subcontractor.

In some instances, it may be necessary to submit the claim to the contractor’s own general liability insurer. It’s always wise to make your Fort Lauderdale construction law attorneys aware of any pending claims against your contracting business.