Archive for the ‘Insurance’ Category

Hurricane Isaac – Are You Prepared

This week New Orleans and south Louisiana are preparing for Hurricane / Tropical Storm Isaac to have an impact on the region. With these type of events come an aftermath where property owners and contractors are left scrambling to put the pieces back together. The best way to quell the negative effects of an event like this is to be prepared.

Undoubtedly, there will be those who need to make property damage claims. Undoubtedly there will be contractors who come into the area trying to make a few dollars on the repair. It will be tempting to save a few dollars and go with the cheap (unlicensed or uninsured) contractor but that is a recipe for disaster.

There are lots of great resources for homeowners and contractors alike at Louisiana State Contrators Licensing Board’s website. This is a very important step in finding good qualified contractors to do remediation work. Further, contractors who come in from out of state will need to register on this site before performing work in Louisiana.

As for dealing with insurance companies to make your claim. I advise clients to take pictures and video of your property before the storm makes landfall. This will give you an up-to-date log of your inventory. Then after the damage has occurred, then you will need to make yet another video/picture document log. Concurrently with this you will need to put your insurer on notice of any and all claims. Look to your policy, insurer’s website, or the Louisiana Department of Insurance website for contact information on your company. Notice of the claim is nearly as important as documenting the claim. Click here for a more detailed claims process rundown.

In recent years Wolfe Law Group has handled hundreds of insurance claims dealing with property loss. Contacting experienced professionals to help with your claim will ensure that you receive the maximum amount of indemnity. We will be monitoring the situation closely for our neighbors in South Louisiana.

 

 

Posted in:     Construction News, Insurance, Litigation, Louisiana  /  Tags: , , , , , ,   /   Leave a comment

California Legislature Further Helping Subcontractors

I recently found a good article on JDSupra.com, always a great source for solid legal content, regarding California Senate Bill 474. This Bill protects subcontractors when contracting so that they cannot be held liable to indemnify the general contractor or owner from certain types of negligence. Author, Maria Giardina of Sedgwick, LLP, does a very good job of explaining the step that the California Legislature has taken to further protect the interest of subcontractors who often enter into one-sided contacts with general contractors in order to procure work in this troublesome economy.

This Bill raises a bigger and more overarching question as to why do state legislatures feel the need to make rules to restrict the freedom to contract. The legislature here is essentially trying to protect the subcontractor from itself. In a perfect world, general contract presents the subcontract document to the subcontractor, and that sub has its lawyer review the contract to see if the terms can be negotiated so that its a fair document for all involved. This new Bill, allows for subs to enter into subcontract agreements with general contractors and then after-the-fact afford the sub protections because the general contractor had a well written contract.

William M. Hill and Mary-Beth McCormack author a well written article on protecting a subcontractor from itself. This article deals with a hot construction law topic, pay-when-paid vs. pay-if-paid clauses.

It seems from the face of California Senate Bill 474 and many others like it across the country, that we are on a path toward heavy government regulation of our business relations. I understand that the little man needs protection from corporate might, but I believe that we have gone too far. Let the parties contract to whatever they want. If it goes against public policy, then the provision is void on its face. There is no need to waste taxpayer money to draft, argue, and pass bills such as these.

For more on this topic, see Gordon & Reese, LLP article and Senator Noreen Evans.

Posted in:     California, Construction Contracts, Construction News, Insurance, Litigation  /  Tags: , , , , , , , , , ,   /   Leave a comment

David v. Goliath – The Difficult Task of Fighting Your Insurance Company

I was recently speaking with a client about the posture of a pending case and the client was surprised to know that nearly all of the insurance companies that were originally brought into the suit had whittled their way out due to policy limitations, lack of coverage and policy exclusions. Most laymen, including contractors and homeowners, believe that if they purchase a policy or file suit against another party’s insurance policy that there will be a windfall payout all the way up to the policy limits. This is simply not the case. Insurance companies are constantly, from year to year, changing the language of policies and inserting exclusions so as to limit exposure if there is an occurrence.

A prime example of how far insurers will go to limit exposure is apparent in a recent Louisiana 5th Circuit of Appeal decision where the appeal court put aside technicalities to let common sense prevail. The case appeal opinion is in the Mason v. Bankers Insurance matter coming out of the 24th JDC for Jefferson Parish. Basically the homeowners, Mason and Bankers filed concurrent Motions for Summary Judgment and the trial court ruled in favor of Bankers Insurance, finding no coverage and dismissing the case. On appeal the ruling was vacated and remanded, basically deemed improper.

This happens all the time in law and is not the uncommon or disturbing part. The interesting part is how the facts and law are blended together in such a manner that the trial court was not able to find coverage under the policy. To sum up the facts, the Mason’s experienced plumbing issues whereby their toilet would back up, raw sewerage would enter the home and a subsequent bacterial contamination was the end result. Upon investigation, there was a breach in a sewerage line in the slab causing the damage. The Mason’s incurred over $14,00o in damages and then made a claim against their homeowners insurance, just as we would all do in this instance.

Bankers did as most insurers do, they denied the claim as not being covered, therefore the Mason’s were forced to file suit to recover their damages. Bankers argued and the trial court agreed that the underground (in the slab) plumbing system of the home was not a property that is covered under the policy. Bankers claims that the plumbing system is not attached to the dwelling! The main crux of this argument is that a structure needs to be habitable in order for it to be covered. Bankers wanted the court to rule that any attached structure (to the main structure) be habitable. Of course a plumbing system is not habitable, neither is an HVAC system or a roofing structure. This is just one of many clever ways insurance company lawyers attempt to avoid coverage.

Although, the Appeal Court ruled in favor of the homeowner here, it did leave the door open for Bankers to win at trial if it can prove certain exclusions that it is asserting. The reason why the trial court erred is because there are facts in dispute. All lawyers know that if there are facts in dispute, Summary Judgment is not proper. The Mason’s are not out of the woods yet and from the looks of it have a long fight ahead dealing with Bankers.

Cases and situations like this are not the exception, but rather the norm when claimants are battling their insurance companies. It is an unfortunate status quo that has been created. Most insureds do not even make it to court and simply let the insurance company win by either doing nothing or taking pennies on the dollar to resolve the claim. Know these facts as true when deciding to sue or make a claim against your insurance company: 1) insurers will do all that they can do exclude or preclude coverage, 2) insurers have the resources to fight it out to the bitter end, and 3) the only way to make insurance companies pay what they are supposed to, is to get represented and fight back!

Posted in:     Construction News, Damages, Insurance, Litigation, Louisiana, Warranties  /  Tags: , , , , , , , , , , , , , ,   /   Leave a comment

California Contractors Need Workers Compensation Insurance, or else…

One of my favorite places to find good content and expert opinion regarding construction and legal issues is JDSupra.com. This is a service whereby bloggers and others can post content and it is marketed by JDSupra. In one of JD’s tweets last week I discovered a very informative article by Matthew Hicks regarding Workers’ Compensation Insurance law and jurisprudence in California.

Hicks sites two landmark cases, Wright v. Isaak, 149 Cal.App.4th 1116 (2007) and Loranger v. Jones, 184 Cal.App.4th 847 (2010). See Hicks article for the in depth analysis of these cases. The bottom line here is that all California contractors need to be sure to maintain proper and adequate workers compensation insurance.

The main statutory component of Hicks article and the source of Workers Compensation law in California come from California Business and Professions Code §7125.2 which states in pertinent part:

“The failure of a licensee to obtain or maintain workers’ compensation insurance coverage, if required under this chapter, shall result in the automatic suspension of the license by operation of law in accordance with the provisions of this section…”

The key elements here are 1) obtain or maintain, basically saying that the contractor has a duty to get it and then a duty to keep up the correct amount of insurance. The other important element quoted above is 2) the fact that the suspension of the license occurs by “operation of law,” meaning that you do not have to be caught and if/when a contractor is caught without or under insured, the suspension of the license will have automatically happen retroactive to the date of insufficient coverage. Needless to say, this is pretty powerful language.

Just as Hicks points out in his well written-piece, contractors need to abide by and closely adhere to the requirements for Workers Compensation insurance. This can be complicated and contractors should get legal advise when making such decisions.

For further reading see Wesley E. Meyers article here.

Posted in:     California, Construction News, Insurance, Licensing  /  Tags: , ,   /   Leave a comment

Contractors Get Good Insurance & Use It!

More and more in my everyday practice I encounter issues with contractor general liability insurance (GL). Whether I am defending a contractor or going after one, there tend to be issues with GL carriers. Here are some tips on coverage and others for contractors who have issues.

First and foremost, contractors need to get a solid policy, pay the policy premium form year to year and do not let it lapse. This is typically where contractors get it right. The bad thing is, that most think this is all they need to do in order to be “covered” in the event of a loss or occurrence. Unfortunately, I represent contractors all the time who never take it past this step.

Next, the most important and most often overlooked aspect is notifying the insurer when trouble starts. Every policy has notice requirements within it that must be strictly followed. If you are an electrician and a fire happens on the job, the first person you should call is the insurer and/or your insurance agent and put them on notice. This way you put the ball in the insurance company’s court, and legally they must do certain things in response, such as decline coverage and/or adjust the claim. If you ever have a lawsuit filed against you put the insurer on notice immediately! This is a must, and I’ve had insurers get out of cases the insurance company was not noticed timely.

A lot of contractors do not want to make claims to the insurance because they feel they policy premium will rise. While this may be an end result, the potential downside of litigation is much more harsh than an increased policy premium. Do not be afraid to make the claim because the insurer will not hesitate to deny your claim and/or fight you regarding coverage.

One huge benefit of notifying insurers when problems occur, is the insurers duty to defend. Even if there is the slightest possibility there may be coverage under the policy, the insurance company has s duty to defend a contractor in litigation. This aspect alone could save you thousands of dollars in legal fees. Insurers will defend the insurable interest, so it may be wise as a contractor to get separate counsel to assure that all of your interests will be covered. The counsel you retain personally can work in conjunction with the one provided by the insurer, whereby you get double the legal manpower for half the price.

Finally, most contractors know and all should know that GL policies do not cover bad work or defective workmanship. This would be covered in a totally different policy called builders risk. Courts here in Louisiana have decided on a number of occasions that GL policies do cover damage that is a result of bad workmanship. ie… a GL policy does not cover a poorly installed leaky roof, but it will cover all the water damage the house suffers as a result.

The moral of this story for contractors to not only get GL coverage, but to use it. There is no point in paying thousands of dollars each year for a premium, if you are not going to use the benefits of it. If you think the insurance company is going return the favor if an issue does arise, you will be sadly mistaken.

Wolfe Law Group fights for the rights of owners/contractors who are having issues with insurance companies and other players in the construction industry.

Posted in:     Business Matters, Damages, Insurance  /    /   1 Comment