Contractor CGL Occurence/Prior work exclusion
Moderators: Josh, independent guy
Contractor CGL Occurence/Prior work exclusion
There are companies out there selling CGL coverage to residential contractors in tough states like AZ. These certain companies are offering CGL on an occurence form but with a prior work exclusion (not just prior damage). To me this is a risky way to sell coverage. It is claims-made coverage disguised as occurence coverage. The average artisan may not be clear on the exposure left bare by the prior work exclusion. Does anyone out there routinely sell this coverage to artisans? Can you sleep at night? How long will it be before this practice is tested in the courts? Opinions...?
First, the coverage form excluding prior work is quite common these days in California. Most insurers who exclude prior work [as differentiated from prior acts] allow work in progress at the inception of the policy to be covered. They exclude work that has been completed prior to the policy.
The way to contain the rampant Montrosing of residential construction claims is to leave them with the former carrier who usually had Occurrence coverage. Occurrence form residential construction writers are usually dead men walking if they do not exclude prior work.
Second, the coverage form is NOT claims made as it does not require claims that occur during the policy period during the currency of the policy. There is one form, I believe Lincoln General, that does have such a restriction coming & going but that is unique. Even the ProBuilders form has been strenghtened by providing for spillover among policies. Read it thoroughly.
The way to contain the rampant Montrosing of residential construction claims is to leave them with the former carrier who usually had Occurrence coverage. Occurrence form residential construction writers are usually dead men walking if they do not exclude prior work.
Second, the coverage form is NOT claims made as it does not require claims that occur during the policy period during the currency of the policy. There is one form, I believe Lincoln General, that does have such a restriction coming & going but that is unique. Even the ProBuilders form has been strenghtened by providing for spillover among policies. Read it thoroughly.