Because Results Matter. Contact Us Today For A Free Consultation.
  949-444-5306
Customized Legal Services For Businesses And Individuals

WRAP exclusions could cause problems for developers down the road

Insurance coverage is a large part of California construction projects. No one, from developers to subcontractors, wants to be left holding the bag if something goes wrong. With the increase in the use of WRAP exclusions, a general contractor, owner or developer could end up not having access to a subcontractor's insurance coverage if needed.

The purpose of the exclusions is to make sure that coverage is not duplicated, which could be costly for those involved. For instance, where coverage for property damage or bodily injury is already available through an owner's consolidated insurance program, an exclusion could be in place to prevent duplicative coverage. This may make sense for the subcontractor, but it might not for anyone upstream.

General contractors and owners may begin to screen their subcontractors to see whether they have these exclusions in their policies. It may also depend on whether a subcontractor participates in the owner's consolidated insurance program as well. Subcontractors may be required to remove exclusions or make specific assurances that the exclusion does not apply to a particular project. Only time will tell how WRAP exclusions will be dealt with by a particular set of parties.

In fact, WRAP exclusions and their implications could become a negotiating point for California developers and general contractors who want to work with certain subcontractors. The uniqueness of every project may mean that addressing this issue on a case-by-case basis may be in order. In order to make sure that a party's rights are protected and that he or she ends up in a good position overall, it may be a good idea to consult with an attorney who routinely assists with these matters.

No Comments

Leave a comment
Comment Information