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South Florida Construction Attorneys
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August 2012 Archives

Professional Liability Policies 101

ever wonder what to look for when hiring a design professional?  One key step is to verify that the design professional is adequately insured in the event of any potential claims regarding the design professional's work.  This primer will help you learn what to look for.  Professional Liability Policies 101

Should I Lien or Should I Bond? Or Both?

When you enter into an agreement to furnish labor, materials, and construction services, but that agreement requires the other party to pay you only after you have started performing, you are extending credit. No surprise, but not all owners and general contractors are credit-worthy. "But," you say, "Florida law provides me with lien rights." If you are careful to comply with the many technical requirements, it is true that you may have lien rights. But, what if the construction lender's mortgage that has priority over your lien exceeds the value of the property? Your lien may be value-less. Many subcontractors over the last few years have found themselves in just that situation. If you are fortunate enough to be able to say that you are protected by a payment bond, then you might be in good shape. However, even in the case of a bond, you must still be careful to ensure the greatest chance of getting paid.

Know Your Insurance Policy?

As attorneys representing members of the construction industry, we are constantly emphasizing to our clients the importance of reviewing and understanding their insurance policies. Often times, a client knows that the company is insured, but does not understand what is covered, and sometimes more importantly, what is not covered by the policy.

Florida Construction Lien and Bond Law Changes

The 2012 Florida Legislature made some significant changes to the State public bonding statute, Fla. Stat. 255.05 and the Florida Construction Lien Law. House Bill 897 passed and became Chapter 2012-211, Laws of Florida effective October 1, 2012:

Insurance Claims Must Be Timely Raised - Even if Unknown

In October of 2005, the home of Justin and Selma Soronson ("the Insureds") was hit by land falling Hurricane Wilma. ("the Home"). The Insureds did not notice any damage, nor was damage apparently visible from a reasonable and customary inspection. More than three years later, in 2009, an inspection was performed on the roof of the Home that revealed damage that appeared to be caused by a windstorm event. The Insureds immediately notified their insurance carrier and complied with the insurance policy's requirement for submission of a sworn proof of loss. The insurance company conducted its own inspection, and denied coverage. The insurer claimed that no damage was verified, and the passage of time prior to notice of the claim being made prejudiced the insurance company's ability to properly determine the cause of any such damage. Judgment was entered in favor of the insurance company and an appeal ensued.

Even a Clear Contractual Term Can Sometimes Be Avoided

So you negotiate the agreement you want, and then a term is slipped into the agreement that you fail to see before signing. Usually, you are bound by the agreement you execute and are presumed to have read it completely. Generally you will find yourself stuck to perform even where you had not agreed to do so except for your signature on the agreement. There is a possibility that would allow you to avoid such an obligation, even where the agreement provides that the agreement may not be changed except through a subsequent written agreement between the parties.

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