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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.