Can Construction Defect Cases Be Heard with AF?

Image of workers and equipment on a construction site

Construction defect cases can be rather complex and involve multiple parties. There are often matters of liability to be sorted out, but there are also disputes over coverage and defense. It is common practice in the world of construction for the general contractor to require that it be named as an additional insured on its sub-contractors' liability policies. Because construction defects are often not discovered for quite some time after substantial completion of the project, a contractor may have been insured with multiple carriers between completion and notice of the defect, leading to disputes concerning time on risk and defense costs.

AF's Special Forum is designed to process construction defect cases as a concurrent coverage matter and/or contribution among co-defendants. Our rules define a construction defect dispute as "Special Arbitration: A dispute among one or more Casualty insurance companies or entities that are 'Self-Insured' for a construction defect claim involving completed operations resulting in damages to real property for which one or more Insurers or Self-Insurers provided defense and/or indemnity for the construction defect claim and allege that one or more other Insurers or Self-Insurers provided concurrent coverage for the same construction defect claim."

AF's Special Forum provides our members with an opportunity to defend their insured and settle construction defect claims with the damaged party, then to pursue contribution from the responsible party's insurer. This allows you to cap costs and save time in your recovery efforts. Members may also defend and indemnify a co-named insured and file arbitration in the Special Forum for recovery of those costs. Of course, the Special Forum can also be used to sort out matters with non-signatory insurers or self-insured parties with written consent.

Construction defect cases in the Special Forum are heard by arbitrators certified in construction defect claims. AF is always looking for experienced claims professionals to serve as arbitrators. If you have experience in construction defect claims and have an interest in serving as a construction defect arbitrator, please visit our website's Becoming an Arbitrator page.

Article published in: August 2017 E-Bulletin