Construction Defect Claims: Allocation Among Contractor and Subcontractor Policies, Additional Insureds
Impact of Horizontal vs. Vertical Exhaustion Rules on Multiple Layers of Coverage
Recording of a 90-minute CLE webinar with Q&A
This CLE course will discuss vertical vs. horizontal insurance coverage exhaustion in construction defect disputes. The program will analyze the impact of exhaustion on allocation between the contractor's primary and excess coverage, the priority of payment between the contractor and its subcontractors, and the impact on additional insured coverage. The program will discuss best practices for resolving allocation disputes in construction claims involving multiple parties and layers of coverage.
Outline
- Horizontal and vertical exhaustion of coverage for construction defect claims
- Priority of coverage between contractors' primary carrier and excess insurer
- Priority of coverage between contractor and subcontractor policies
- Impact of exhaustion rules on additional insured coverage
- Dichotomy of views among states and recent case law
Benefits
The panel will review these and other key issues:
- How can counsel resolve issues that arise between the excess carrier and primary carrier when the primary carrier settles for less than the policy limits?
- How do the exhaustion of coverage rules determine priority of coverage between the contractor's policies and policies of subcontractors?
- When additional insured coverage involves both primary and excess policies, what are the best strategies for resolving vertical vs. horizontal exhaustion?
Faculty
David M. Adelstein
Partner
Kirwin Norris
Mr. Adelstein represents general contractors, subcontractors, design professionals, developers, associations,... | Read More
Mr. Adelstein represents general contractors, subcontractors, design professionals, developers, associations, suppliers, sureties, and owners in a myriad of construction matters including, without limitation, construction/design defect claims, schedule-based claims (including inefficiency, lost productivity, and acceleration claims), bid protests, payment disputes, lien and bond claims, liability and property insurance issues, and a host of other issues that affect the construction industry. He prepares and negotiates construction contracts for clients utilizing AIA, EJCDC, and AGC industry form documents, as well as contracts that are not based on an industry form document.
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Michael V. Pepe
Partner
Saxe Doernberger & Vita
Mr. Pepe focuses his practice on complex insurance coverage issues on behalf of policyholders, and has advocated for... | Read More
Mr. Pepe focuses his practice on complex insurance coverage issues on behalf of policyholders, and has advocated for his clients at trial, on appeal and in ADR settings. He routinely handles issues dealing with commercial liability, builders’ risk, additional insured claims, indemnity, and the duty to defend. Prior to joining the firm, Mr. Pepe represented general contractors, subcontractors, architects and homeowners in contract disputes, construction defect claims, and surety bond claims.
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John B. Wilson
Senior Vice President
CAC Specialty
Mr. Wilson is Senior Vice President at CAC Specialty. He has responsibility for attracting clients, talent, and carrier... | Read More
Mr. Wilson is Senior Vice President at CAC Specialty. He has responsibility for attracting clients, talent, and carrier partners to mutually develop innovative complex risk and private financing solutions for corporate and private equity clients. Most recently, he was President of Commercial Insurance at Moody Insurance. He also practiced commercial litigation at a Denver law firm, giving him a unique perspective on managing complex risk. He has expertise in the areas of construction, renewable energy, private equity, architects, engineers, technology, and manufacturing to assist clients in the development of comprehensive risk management programs.
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