United States Fire Insurance v. J.S.U.B., Inc.
979 So. 2d 871 | Supreme Court of Florida | 2007
What This Case Means for Subcontractors
A general contractor's insurance company had to cover damage to completed homes caused by a subcontractor's defective work. The Florida Supreme Court ruled that defective work by a subcontractor counts as property damage under standard commercial general liability (CGL) policies issued after 1986, as long as no specific exclusion applies. This matters to subcontractors because it means general contractors can potentially recover insurance proceeds for your defective work, which could lead to claims against you or your own insurance.
Key Takeaways
- •Your defective work can trigger the GC's CGL insurance coverage for the completed project—make sure you understand what your indemnification obligations are in your subcontract
- •Post-1986 CGL policies with products-completed operations coverage are broader than older policies; check whether your contract requires you to flow down specific insurance requirements to protect yourself
- •Broad indemnification clauses in your subcontract may require you to defend and pay for damage caused by your work even if the GC's insurance covers it—negotiate limits on indemnity scope before signing
- •The specific policy language matters; exclusions and exceptions can change coverage, so review your own CGL policy and your subcontract's insurance requirements carefully
Defective work by subcontractor constituting property damage caused by occurrence is covered.
Frequently Asked Question
If my defective work damages a completed project, will the general contractor's insurance cover it?
Yes, under Florida law, a general contractor's standard CGL insurance issued after 1986 will typically cover damage caused by your defective work, unless the policy has a specific exclusion. However, this doesn't protect you—the GC's insurance company may pursue claims against you or your insurance to recover what they paid. Always carry your own CGL insurance and carefully review indemnification clauses in your subcontract.
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