February 11, 2016 Articles

Is There Coverage for Defective Work? A Short Question with a Long Answer

A trigger of coverage under the contractor’s commercial general liability policy not only affords the contractor a defense at the cost of its insurer, but also can provide an available source of funds to resolve the owner’s claim and/or pay an adverse judgment

by David B. Applefeld

Determining whether and when the duty to defend ends can be complicated. This is particularly so if only part of the underlying action is resolved or only some defendant insureds are dismissed or the underlying action is not final. The analysis may touch on procedural as well as substantive law governing the underlying action. An insurer withdrawing the defense could find itself facing claims of breach of contract or bad faith—whether or not it acted properly in withdrawing.

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