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Legislative Update

California Subcontractors Legislative Conference

We invite your organization to "Capitalize on Success" in Sacramento, by participating in the second annual California Subcontractors Legislative Conference on Wednesday, April 2, 2014. You’re invited to co-host this important event that you and your company people will want to attend.

Subcontractors, suppliers and industry service providers will be gathering at the Hyatt Regency Sacramento across the street from the Capitol to discuss pending legislation that affects the construction industry.

There are issues you will want to learn about and lobby:

  • 5% Retention Cap in Public Works Being Circumvented!

We need to close the loophole which allows public entities to declare every

project "sufficiently complex" and evade the 5% cap!

 

  • By April there will be other measures that will require our involvement.

The time to make your mark on the issues in 2014 is during this conference when the bills are being amended for committee hearings and voting. Attendees will have the opportunity to visit their own senator and assembly member after learning how to lobby their position on the bills. Talking points will be provided. This event is the least expensive and most productive way to get your message across. Please join the effort and stand out as a leader in the legislative arena.

Given todays economic realities, two things are obvious:

● We all need to have a say in anything the legislature does regarding construction.

● Combining our resources for this event will help make our lobbying successful.

Planning and marketing the event is a joint effort among the hosting organizations/companies. They will determine the days program, their logos will appear on the conference materials, and their identity and issues will be presented to legislators and key capitol staff.

Should you wish to participate in planning the event and agenda as an event host, please contact our Executive Director, Jordi Grant, 

AMERICAN SUBCONTRACTORS ASSOCIATION CALIFORNIA INC.

TOLL-FREE: 888-310-ASAC (2722) FAX: 530-662-2865 This email address is being protected from spambots. You need JavaScript enabled to view it.">asac@asacalif.com This email address is being protected from spambots. You need JavaScript enabled to view it.">www.asacalif.com

Connecticut Supreme Court Rejects Insurer’s Denial of Coverage for Contractor’s CGL Claim

ALEXANDRIA, Va. — On June 11, 2013, the Connecticut Supreme Court officially released a ruling confirming that Commercial General Liability insurance policies do insure property damage that unintentionally results from defective work. The decision supports the American Subcontractors Association’s position that insurance companies must deliver what they promise in their CGL policies.

“Insurance policies … are designed to cover foreseeable risk, including negligent acts,” the Connecticut Supreme Court wrote in Capstone Building Corp. and Capstone Dev. Corp. v. American Motorists’ Insurance Companies. “For the same reason, the mere fact that defective work is in some sense volitional does not preclude it from coverage under the terms of the policy.”

In the case, the contractor, Capstone Building, entered into a construction contract with the University of Connecticut for work, coordinated and supervised by Capstone Development. Under the prime contract, the university was required to purchase CGL insurance for itself, the insured contractor and “subcontractors of all tiers.” The university obtained an owner-controlled insurance program policy underwritten by American Motorists. The project was completed in 2001, but in 2004, the university discovered construction defects that caused damage and filed a claim against the contractor. The contractor tendered the claim to American Motorists, which denied the claim, and the contractor sued, asking a court to declare that the CGL policy in question provided a defense and indemnity to the contractor.

In an amicus brief, filed on May 2, 2012, ASA argued that, under Connecticut law, the CGL policy provided on the construction project covered property damage to non-defective work, despite the insurer’s denial of coverage. “Insurance plays a critical role for the members of ASA in managing the serious risks inherent in the construction industry, and those members have a significant interest in being able to rely on their insurers to provide coverage for risks for which they paid substantial premiums,” ASA wrote.

Further supporting ASA’s position, the Connecticut Supreme Court quoted in its decision a 2007 case, Lamar Homes, Inc. v. Mid-Continent Casualty Co., in which ASA also filed an amicus brief in support of coverage: ‘‘[A] deliberate act, performed negligently, is an accident if the effect is not the intended or expected result; that is, the result would have been different had the deliberate act been performed correctly. ... Accordingly, because negligent work is unintentional from the point of view of the insured, we find that it may constitute the basis for an ‘accident’ or ‘occurrence’ under the plain terms of the commercial general liability policy.”

The Connecticut Supreme Court decision follows the growing national trend that construction defect claims resulting in unintended property damage are a covered CGL policy occurrence.

The state Supreme Court added that CGL policies do not insure claims to repair or remove the faulty workmanship itself. “If a subcontractor’s defective work unintentionally damages non-defective property, the damage can be insured by CGL policies through an exception to the ‘your work’ exclusion, though the ‘your work’ exclusion prohibits coverage of damages arising from the insured contractor’s own defective work,” explained Eric Travers, Esq., of ASA-member law firm and ASA general counsel, Kegler, Brown, Hill and Ritter, Columbus, Ohio.