As a contractor should you notify your general insurance carrier of any claims against you? Contractors, always submit your claims to insurance. While you may believe the claim is not covered, without asking you will never have an answer. If your carrier does accept coverage or accepts under a reservation of rights, your carrier may provide you counsel or pay a portion of your attorney’s fees incurred. There is also the possibility that your carrier may pay any damage award against you.
So contractors, always submit your claim to insurance. You only need to read Perini/Tomkins v Ace Anmerican Insurance to understand why.
Perini/Tomkins were a joint venture construction manager of hotel project in Oxon Hill, Maryland. The General Contract required the owner to purchase an Owner Controlled Insurance Program. During the course of the project a glass atrium weighing about 2,000 tons collapsed. The collapse not only caused damage to the project but also caused delays.
The Hotel and Contractor both brought affirmative claims against each other. The owner sought $65 million from the contractor relating do damages and delays. The contractor sought an unpaid contract balance of about $80 million. The parties eventually settled, at which point the Contractor filed a lawsuit against the insurance carrier in an effort to recover the losses resulting from the atrium collapse that had not been paid by the Owner. The trial court ultimately dismissed the claim on the grounds the settlement occurred without consent, which was required by the insurance policies.
So, regardless of the nature of the claim Contractors, always submit claims to your insurance.
