Does a contractor's liability insurance cover defective work?

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Apr 1, 2018
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#1
I would very much guidance on whether we might have any options to obtain partial or full compensation for an inadequately installed roof in 2011. I am particularly interested in the possibility that the contractor's liability insurance might cover our cost of just over $10,000 to replace the roof in 2015.

In 2011 my wife and I had half of our detached home extensively remodeled in Rockville, MD. The work added a 10' x 10' sun room with a sloped copper roof.

About 15 months after the "substantial completion" date, the sun room roof began to leak. Initially believing that the contractor's warranty was limited to 12 months, we asked an independent roofing firm to evaluate and propose repairs. The assessment identified two pipe collars installed backward and that the flat copper seams at the lower section of the roof had been sealed with roofing cement, rather than solder.

We then communicated with the original contractor by phone and e-mail. Consistently cooperative and apologetic, he clearly accepted responsibility and returned repeatedly, albeit unsuccessfully, over the next two years to try to stop the leakage.

He first had his subcontracted roofer return to replace the cement with solder. That repair lasted almost one year before we began to see new evidence of leakage. Roofing experts from other firms later explained that it’s impossible to reliably solder seams except while the copper is new, because oxidation, dirt, and residues of the cement in this case prevent proper bonding between the solder and the copper.

We have e-mails that document communications about recurrent leaks on seven dates between 2013 and 2015 and four return visits by the contractor in 2014 to try to repair the leakage.

While we were out of the country in March 2015 we learned by e-mail from our next door neighbor that the woman who came to clean the house had found a lot of water draining from the ceiling. On our return, we decided that the problem required a final resolution. We invited assessments and bids from several companies and then selected one to remove and replace the defective roof and to repair and repaint the damaged drywall ceiling and walls, including replacement of any moldy insulation. This roofing work was completed in Sept. 2015.

We then filed a complaint with the Maryland Home Improvement Commission (MHIC), followed by a claim for reimbursement. This process ultimately failed, as the administrative law judge found insufficient evidence that we had submitted the claim within the 3 year time limit. I had not sent the claim package by certified mail to establish the date. In addition, she accepted the contractor's estimate that the cost for definitive repair should have been only $1,500. The appeals court did not agree with our view that both decisions were grossly unreasonable.

So having failed with the MHIC process, including the appeal to the Circuit Court, might we be able to take advantage of the contractor's liability insurance? We have the name and policy number from our original remodeling contract (which had no arbitration clause), and we have communicated with the company. The representative claimed that this kind of policy would not cover re-doing work that had been performed inadequately or defectively.

Does that sound right?

Any advice would be very much appreciated!
 

mmb

Verified Member
Jan 20, 2015
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#2
Latent defects are covered for several years. If the roof was installed improperly that is a latent defect.
Get an attorney.
 
Likes: Neil Maley

Neil Maley

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Dec 27, 2014
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www.promalvacations.com
#3
Liability insurance generally doesn’t cover shoddy work- it covers the contractor if they damage your property while working on it.

Have you contacted the contractor? There should be a warranty on the roof.
 
Apr 1, 2018
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#4
Thanks for both of these prompt notes.

Yes on contacting the contractor. Initially he had his roofing subcontractor, the guys who had installed the copper roof, come back to grind off the roofing cement and properly solder the seams. That was the repair that lasted about a year. Then our contractor personally returned time after time during 2014, each time expressing confidence that he had finally fixed the problem.

Regarding working with a lawyer, I might be out of luck. I had assumed originally that the MHIC process would work very smoothly, so I lost time following that approach. Now I think the statute of limitations has expired for this civil matter:
http://statelaws.findlaw.com/maryland-law/maryland-civil-statute-of-limitations-laws.html

But if the contractor's liability insurance SHOULD cover my expense, then I wonder about working through the state insurance commissioner. What do you think?
 

Neil Maley

Moderator
Staff Member
Advocate
Dec 27, 2014
12,779
12,758
113
New York
www.promalvacations.com
#5
We aren’t contracting experts and laws are very different in different states and municipalities. This has been going on for three years?

Why don’t you sue the contractor and sub contractor? That might be your best best. His insurance usually doesn’t cover shoddy workmanship. Have you filed complaints with your Consumer Affairs Department, your last cal government where they at licensed or the Attorney General in your state?

This article explains that their insurance doesn’t usually cover shoddy work. Taking then the court might your best bet. Did they give you any type of warranty on the job? But you really need them hire an attorney- they would know definitively.

https://budgeting.thenest.com/contractor-insurance-cover-poor-workmanship-32398.html
 

mmb

Verified Member
Jan 20, 2015
809
904
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#6
From my Architect husband, who is well versed in who is responsible for what, under Construction Law,
-if the Contractor still has a Business Liability policy;
-it should cover your latent defect.
Again, his advice, ask an attorney who practices construction law.
 
Likes: jsn55
Apr 1, 2018
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#7
Thanks for these replies. I'll explore next with a lawyer. Maybe the clock for the statute of limitations might start when I paid for the replacement roof, so it might still be timely.
 
#8
For what it's worth, our townhouse (in Rhode Island) was built in 2003 and we bought it in 2008. In February of 2010 we were in Florida when we received a phone call from someone checking on the place that there was five feet of water in our mostly finished basement, and our wine cooler was floating up the stairs with its light still on. I found this strange because I had turned off the water with the valve in front of the meter in the basement before we left.

Turns out the plumbing subcontractor hadn't properly fastened the copper piping to the plastic pipe that entered through the foundation. It separated while we were gone and raw water poured in for several days.

Then we discovered that the condo insurance policy no longer covered owner-made improvements such as finished basements. The change was made two weeks before we purchased the place but the info outlining the change went to the prior owner, not to us. Our insurance agent had other clients at our condo and gave us coverage for what we needed under the old policy.

The plumber was long gone (probably because this wasn't his only serious mistake) but fortunately the original contractor was still in business. We filed suit and eventually agreed to mediation, the result of which was a substantial recovery that almost made us whole.

My point is, explore every avenue. Talk to a lawyer who is a construction expert, not someone who handles divorces or auto accidents. Do it right away. Good luck!
 
Likes: jsn55