Claim Scenarios

These claim scenarios provide insight into instances where a claim may occur and the lessons learned

Dedicated Claim Support

If an alleged error or omission occurs, a contractor or owner could become entangled in a dispute or litigation that can be costly in terms of time, money and loss of reputation. Our dedicated and experienced claim professionals will help our policyholders manage the issues and concerns so that they can focus on their business. With Professional Liability insurance from Berkley Construction Professional, your clients can rest assured that they’ll be supported when they need it most!

Polluted by Subcontractor Failure

A construction manager (CM) hired and supervised a specialty subcontractor on a nursing home project. Mold was discovered due to a subcontractor’s error in applying fireproofing and failure to provide proper ventilation. Berkley Construction Professional paid more than $700,000 to remediate the mold condition through the mitigation coverage offered by our policy, in addition to the nearly $50,000 in legal expenses. We pursued subrogation against the responsible subcontractor. The subcontractor did not have pollution insurance required in its subcontract with the CM. Therefore, recovery was limited to $120,000.

Leaky Cell Tower

A construction manager (CM) was hired by a wireless service provider to install a cell tower on the roof of a hotel. During a severe rain event, the roof leaked causing significant damage to the occupied areas of the hotel. While the contractor covered the roof with a tarp it was not sufficiently applied or secured to prevent water damage and microbial contamination. The plaintiff’s initial demand was $1.8 million, but through mediation, a settlement of $610,000 was reached. Berkley Construction Professional paid $340,000 on behalf of our policyholder, the CM and $145,000 in legal expenses.

HVAC Value Engineering Gone Wrong

A general contractor (GC) allowed its HVAC subcontractor to propose an alternative approach to the HVAC design of a residential facility incorporating value engineering (VE). The mechanical engineer reviewed the submittal for the VE proposal and requested additional information prior to making a judgment on the submittal. Additional information was not provided and the HVAC system was installed without the mechanical engineer’s approval. When the system failed to provide adequate airflow per state requirements, the owner demanded that the insured and/or the subcontractor repair or replace the system. The initial cost of the repair was estimated at $1 million, but an alternate solution was agreed upon for a cost of $450,000. The HVAC subcontractor paid $300,000. Berkley Construction Professional paid $150,000 on behalf of the GC our policyholder, which included their $50,000 deductible.