Does a builder have insurance if a building has defects? Beware builders and owners!

Most builders or contractors have a commercial general liability ("CGL") insurance policy for a particular project.  It is often required by the construction lender.  However, whether this policy actually affords any meaningful insurance to either the contractor or the owner is another question.

Much to the surprise of builders and owners, construction defects are generally NOT covered by either a CGL policy or the owner's homeowners policy (or business policy).  The example we often give clients is that if your roof leaked as a result of a construction defect, the insurance company might pay for the damage the leak caused, but not the cost of repairing the leak.

Reduced to the most basic terms, a CGL policy will only cover losses caused by an "occurrence" not a defect.  An occurrence could be a fire or storm, for example, that occurs while the builder is working on the project.  It would also likely cover personal injuries suffered by third parties on the job.

Several years ago, CGL policies provided additional insurance for subcontractors on the job.  Under these older policies, if a contractor was negligent, it might be covered under the policy.  However, in more recent years that coverage has been written out of the policy and can only be acquired by purchasing a separate endorsement from the insurance company.

For builders who find themselves without coverage and facing a substantial claim - bankruptcy may be the only alternative which is terrible news for both the contractor and the owner.

Email me if you have other questions.

This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

What are the laws regarding a wrongful death recovery?

There is no more difficult case than one where a loved one has been lost due to the negligence of another.  How can you begin to place a monetary value or something that is priceless?

When faced with a wrongful death situation, here is an outline of the steps that will need to be taken.

1.  You must open an estate.  This is done by going to the Clerk of Court in the county where the person lived or died, and making an application to open the estate.  If the person who died left a will,  then the person appointed in the will to serve as executor will be responsible for opening the estate.  If the person died without a will, then the Clerk will appoint the next of kin to serve as the administrator of the estate, after getting the consent of the other heirs.

2.  Once the estate is opened, the Clerk will issue "Letters of Testamentary".  These "Letters" are somewhat like a power of attorney and it authorizes you to manage the affairs of the estate - from paying creditors to collecting the assets of the estate and distributing them.

3.  North Carolina General Statute 28A-13-3 gives the executor or administrator the exclusive right and responsibility for bringing a wrongful death claim.  The statute of limitations to bring a legal action to recover for wrongful death is two years from the date of death.

4. What may be recovered in such an action is also set forth in the statute.  What may be considered in evaluating such a claim are:

    (1) Expenses for care, treatment and hospitalization incident to the injury resulting in death;

    (2) Compensation for pain and suffering of the decedent;

    (3) The reasonable funeral expenses of the decedent;

    (4) The present monetary value of the decedent to the persons entitled to receive the damages recovered, including but not limited to compensation for the loss of the reasonably expected;

        a. Net income of the decedent,

        b. Services, protection, care and assistance of the decedent, whether voluntary or obligatory, to the persons entitled to the damages recovered,

       c. Society, companionship, comfort, guidance, kindly offices and advice of the decedent to the persons entitled to the damages recovered;

4.  Proceeds from a wrongful death statute are distributed to the deceased person's heirs pursuant to a statute and regardless of whether the person had a will.  Any money recovered is distributed as if the person died without a will.  Also, any proceeds that you may recover may not be used to be creditors of the estate (except for some limited funeral and medical expenses).  However, if the person lived and was conscious before he or she died, the estate may also be entitled to recover for personal injuries (medical expenses, pain and suffering, etc.) in addition to a wrongful death recovery.  In this case, the funds do pass through the estate (under the will, if one exists).

5.  If a settlement is reached in a wrongful death action, it must be approved by all of the heirs or by court order.  (Court approval is always required if an heir is a minor).

If you have additional questions, email me.

This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Make sure that your automobile insurance policy has underinsurance coverage in the event of an automobile accident.

Did you know that in North Carolina, a person is only required to have $30,000 in automobile liability insurance coverage?  With the rising cost of health care and mandatory diagnostic medical procedures, a person seriously injured in an automobile accident may face medical expenses in excess of $30,000 in a matter of a day or two. That is why it is imperative that your insurance policy contain underinsurance coverage, sometimes called UIM.

UIM coverage means that if the person who caused the accident does not have enough insurance to pay you for your medical bills, pain and suffering, lost wages, disability, etc., then your policy will provide you with additional coverage - up to a million dollars.

Buy UIM is not required in North Carolina and there is an additional premium to have it included in your policy.  However, the increased premium is well worth it.  Furthermore, if you make make a UIM claim, it will not increase your premium or affect your insurance in any way.

In making a UIM claim, one must be very careful.  Oftentimes the injured party will mistakenly give a release to the insurance company that insured the person that caused the wreck. When this occurs,  your right to make a UIM claim may be lost.

If you have questions about this, email me at Fred DeVore visit us at DeVore, Acton & Stafford, Attorneys at Law.

This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.