Case Study Sample

Wolfpoint Advisors Case Studies

Issue at hand

Carrier not honoring their form

Parties involved

Carrier A General Contractor

Carrier B Subcontractor 1

Carrier C Subcontractor 2

Claim

Employee of Subcontractor 2 fell and is suing GC and Subcontractor 1 for neglicence

Target Tender Issued

Yes — to Subcontractor 1 and Subcontractor 2

Results

Subcontractor 2 files for a declaratory judgment and maintains there is no duty to defend the General Contractor

Language of the general liability policy and forms is being interpreted differently issue:

Carrier C was maintaining that the coverage forms they provided were not intended to cover the General Contractor as being requested in the Target Tender. They sent a reservation of rights letter as well as filed for a declaratory judgement

Carrier B accepted liability and coverage without reservation

 

Resolution:

Worked with Carrier B to defend the General Contractor with regard to the Declaratory Judgement

Notified all subcontractors that the Carrier C is no longer acceptable to have if they would like to work with the General Contractor

Final Outcome:

Carrier C agreed to drop the declaratory judgment, accepted tender under reservation of rights. Carrier B & C shared in the defense of the General Contractor. Carrier A made no indemnity payments under their policy.

 

Carrier C was maintaining that the coverage forms they provided were not intended to cover the General Contractor as being requested in the Target Tender. They sent a reservation of rights letter as well as filed for a declaratory judgement

 

 

 

The Cast

General Contractor
Subcontractor 1 Foundation
Subcontractor 2 Electrical

The
Hypothetical
Problem

A general contractor recently won a bid to develop a new wing at a major university in Chicago. Working under strict deadlines and budget, the general contractor hires sub-contractor #1 to work on the foundation, and sub-contractor #2 for electrical instillation. During construction, one of the electrical engineers fell due to negligence at the foundation site. The electrical contractor is suing the foundation contractor and the general contractor for negligence.

Language of
General Liability
Policy and
Forms is Being Interpreted Differently

The electrical contractor filed a Declaratory Judgment, their insurance coverage is not intended to protect the general contractor as requested in the Target Tender. There is a confusion of liability between the general contractor and electrical contractor in regards to compensation. The general contractor hired both subcontractors with the understanding that their insurance policy would protect all parties at the construction site. The foundation contractor has accepted full liability for their negligence without hesitation.

Resolution

Wolf Point Advisors worked with the foundation contractor to defend the general contractor against the Declaratory Judgment. The general contractor made their insurance policy requirements crystal clear to all sub-contractors, everyone needs full coverage. The electrical contractor is no longer permitted to work with the general contractor.

Final Outcome

The electrical contractor agreed to drop the declaratory judgment against the general contractor. The electrical contractor accepted tender from under reservation of rights. The electrical contractor and foundation contractor both defended the general contractor against the lawsuit. As a result, the general contractor made no indemnity payments under their insurance policy. The electrical contractors insurance provider is no longer acceptable on the sub-tier policies.

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