Does insurance protect homeowners against construction defects?

Posted by: Apr 10, 2018By Brian Stutheit

In this blog we will give an overview for homeowners how a contractor’s or construction professional’s insurance relates to residential construction defects.  This blog is applicable to contractors, subcontractors and builders.

First, do not expect your own homeowner’s insurance to cover faulty workmanship.  If the contractor simply does a poor job — improperly installing roof shingles, for instance — homeowners insurance likely won’t rectify the situation because a standard policy typically excludes faulty or inadequate workmanship from its protections.  A homeowners insurance policy may cover repair costs if a contractor accidentally causes a house fire or some other damage to your home.  If the homeowners insurance does pay for repairs, it has the right to recover what it paid from the contractor.

It is essential for any homeowner having repairs to be assured that the contractor has liability insurance.  Liability insurance generally pays for damages if a contractor accidentally causes a house fire, water damage, structural movement, or some other damage to your home.  If the contractor you are using cannot provide proof of insurance, don’t use him or her.  Failure to have insurance is an indicator that the contractor is either unreliable, or has insufficient assets to repay you for damages.  Many a homeowner has a good claim that a contractor negligently caused damages, but no way to collect from that