Every contractor in Texas dreams of a perfect build without so much as a single fault, but reality often has other plans. Construction defects happen — some small, others major — no matter how prepared the contractor is.
Understanding a construction defect
A defect is any issue in the structure, design or quality of work that could cause a deficiency in the function or safety of a building. There are two types of construction defects: patent and latent. A patent defect is one that you can see immediately while a latent defect can take weeks or even months to appear after you’re done with your project. Either way, they both lead to costly repairs and put contractors at risk if they’re not properly covered.
Types of construction defect insurance
The most important insurance for contractors is general liability insurance. This provides broad coverage for bodily injury and property damage caused by your work on a project. It also covers advertising injury liability, medical expenses and much more.
The second type is product-completed operations insurance. This coverage provides protection for any errors or omissions that occur during the course of your work. It also covers any damage caused to the property by faulty workmanship, materials and design.
Thirdly, professional liability insurance, also known as errors and omissions insurance, can help protect contractors from financial losses related to their advice or services. This coverage helps with legal defense costs and potential settlements in malpractice cases.
Lastly, builder’s risk insurance helps protect contractors from damage to their work during the construction process. It covers losses from storms, fires, vandalism and theft.
Parties at risk for a construction defect claim
Texas courts could hold any contractor, subcontractor, vendor, architect or engineer involved in a project liable for a construction defect. For this reason, contractors need to ensure they have the right insurance coverage and adequate limits of liability.
When it comes to construction defects, prevention is always better than cure. Preparation is key to avoiding costly repairs or legal action down the line. The best way to protect yourself is by investing in appropriate insurance policies and carrying enough coverage for your projects and all your workers. Doing so will help you keep your business secure no matter what happens on the job site.
