What Florida Law Says About Property Insurance Coverage for Shoddy Construction Work

Property insurance cases involving sub-par construction work are a hot legal issue in the Florida trial and appellate courts. Until recently, the U.S. Court of Appeals for the Eleventh Circuit maintained a bright line rule with regard to property damage and botched construction. Confoundingly, property insurers were required to cover damages caused by poor construction, but not the poor construction itself. In other words, only damage caused by defective work was covered, but construction missteps were not.

In Carithers v. Mid-Continent Casualty, the Eleventh Circuit reviewed a case involving a situation in which a property owner had to pay a good bit of money to repair defective construction work. Historically, this would not be covered since the defects did not cause actual damage (yet). However, the Court rejected the argument that the “insured could not recover for any defective work, even where repairing that defective work is a necessary cost or repairing work for which there is coverage.” More specifically, the Court held that the costs to completely demolish the work and essentially “start over” should be covered under Florida law.

The Court similarly expanded coverage in a case involving a fire ignited during a welding job, damaging surrounding property and highly-technical (and valuable) equipment. Again, under traditional insurance laws, the actual act of engaging in defective construction work would not have been covered, only subsequent damage caused by the defective welding job. However, the Court opted to depart from that standard in Essex Insurance v. Kart Construction, relying on a string of decisions involving similar damage occurring during a period of repairs or renovation. Specifically in this case, Essex Insurance argued that it should not have to pay for the damage to surrounding equipment and property, particularly since there was a separate fire suppression policy in place to supposedly cover any ensuing fires caused by welding. Nonetheless, the Court held against the insurance company, stating that the exclusion did not apply and the welder’s actions were within the scope of the insurance policy.

If you are facing an uphill battle with a property insurer, or would like to discuss your rights following a botched construction job, contact a reputable property claims lawyer promptly.