Auto Insurance Claims: Business Liability Insurance, Business Liability

Question
QUESTION: If I am purchasing Business Liability Insurance from a broker, would it be a safe assumption that an intelligent broker would sell me just that?  The reason I am asking this is because my husband is a contractor.  14 years ago he went to a local Insurance Broker and asked for a Liability Policy.  He was sold this and now 14 years later he has a claim that the insurance says is not covered.  We have attempted to read the policy, but you have to be a genius to figure out what it actually says.  The situation was a waterline supply burst 9 months after installation causing thousands of dollars of damage to the hardwood floors.  The company refused to pay and now the homeowners insurance wants repayment.  I know most of this is a legal question, but what I really want to know is if I purchase a liability policy, why would it not cover this?  Even if you won't answer, I would sure appreciate any suggestions.  We are in a situation where we can't seem to get anyone to help.  Thankyou

ANSWER: Deb,

  So a water supply line burst?  Whose fault is it that the supply line burst?  If your husband was the cause of the line bursting, and he has liability insurance, then surely the insurance would protect him.  If your husband (or his company) was not the cause of the damages, then the insurance will simply advise the homeowner of that and deny liability.  

  Cases like this one require experts.  I know, trust me.  If I were investigating this claim, the main thing to figure out is who is at fault for the supply line bursting.  If you figure that out, then you know who to pressure.  If the line was improperly installed and it can be proven that this is the reason for the burst, then the installer is on the hook and his insurance (save any specific exclusions) should come into play and protect him.  

   If you send a copy of the policy to me and provide better details about what actually happened, I can probably shed some light on what ought to be done.

I hope this helps!  Information is always free at Petty Details, LLC!

JP

---------- FOLLOW-UP ----------

QUESTION: Thanks so much for you response and your willingness to shed
some light. My husband, the contractor, installed a supply
line in the kitchen.  All plumbing done in the state of PA
has to be inspected and approved by a state approved
engineer.  The engineer pressure tested the supply line and
all was approved.  Nine months later the supply line burst
and caused $17,000 damage to the hardwood floors.  The
homeowners insurance paid for replacement and is wanting
reimbursement.  My husbands insurance is claiming there is
no coverage, so the homeowners insurance company is wanting
reimbursement from us.  If you need any other info, please
let me know.  I am so grateful for your willingness to take
a look at this. Would you like me to mail a copy of the
policy?  Let me know.  Thank you.

Answer
Deb,

   I could surely review the policy and provide my opinion as an adjuster.  Engineer's are not protected from being jointly and severally liable in these types of situations, but the liability can definitely get complicated based on the type relationship that exists between the contractor and the homeowner.  

   Such things as sub-contracting for a general contractor and items such as bonds that may have been required based on the location and scope of the work, etc., etc.

   I don't mind trying to shed some light on the issue for you as it seems that there is either a policy limitation or a disagreement on who is liable for what, and in order to opine on which it is, I would need to see the policy language.

   Frankly, this type of recovery claim requires a lot of great evidence and investigation in order to prove the failed portion of the supply line was indeed due to improper installation or whether it was a manufacturing defect, or some other cause.  I would suspect that your husband's policy will protect him and they are simply arguing that the loss was not his fault.