I am suing my general contractor for performance problems but his insurance company is claiming no coverage because he has not entered into formal contract with his subs. What recourse do I have?

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I am suing my general contractor for performance problems but his insurance company is claiming no coverage because he has not entered into formal contract with his subs. What recourse do I have?

The performance problems are well documented but the general contractor’s
insurance company is claiming no coverage because the general contractor was
negligent in contracting his subs that performed the work in question. We could go
directly after the general contractor, but are concerned that there aren’t enough
personal assets to recover the claim. I am astounded that the general contractor
can get out of his obligation so easily – isn’t there anything we can do?

Would appreciate any suggestion.

Asked on May 27, 2016 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

The problem is, the insurer generally has no obligation to you--it is *his* insurer, and it protects him from claims against him. If they decline to cover him when they should, that may provide *him* with a lawsuit against the insurer for breach of contract (for not providing the coverage he paid for), but does not provide you with a claim against them. All you can do is sue the general contractor, try to recover from him, and see if he then brings his insurer into it.
There is one exception to the above: if you were provided an insurance certificate naming you specifically as a "additional insured" on his policy for this job. If so, that certificate should then give you the necessary connection to the insurer to sue them directly for not paying the claim--though you would be also well-advised to sue the contractor as well (the more people you can validly sue, the greater the chance of recovering money).
Note that if any of the subcontractors were themselves negligent, you could sue them, too.


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