Does General Liability Cover Construction Defects?

A construction-defect allegation can involve several distinct losses: the cost to correct the work, damage to the affected part, damage to other property, and bodily injury. The ISO CGL specimen excludes damage to the particular part of property that must be restored because work was incorrectly performed and generally excludes damage to the insured’s completed work. It has a subcontractor exception to the latter exclusion, but that exception is limited and does not promise coverage for every defect claim.

Determine which policy period applies, when the work was completed, who performed it, and what property was physically damaged. Review the products-completed operations hazard, subcontractor provisions, project-specific endorsements, and the contract’s repair obligations. Ask the insurer to assess the actual allegations and pleadings; a “construction defect” label alone does not show whether any portion is covered.