Guest Blogger: Thomas Messier, CIC. Tom is Vice President of Construction Industry Services at Mason and Mason Insurance Agency, Inc. in Whitman MA. He speaks frequently to construction industry groups about insurance related topics. Tom is a Certified Insurance Counselor, and is a graduate of St. Michael’s College.
Note: To help better understand this article you might want to first read Tom’s previous post titled: Does Your Liability Policy Have the Right ‘Coverage Trigger’?
What’s a “Triple Trigger” — Can You Or Your Insurance Agent Answer That Question?
The Set Up
Let’s say five years ago you completed work on a commercial construction project. Then last month you received notice that part of the structure collapsed and that your client is filing a claim against your firm for the needed repairs, plus loss of use of the structure during the rebuilding. Their complaint is that your original work was done improperly and the stress cracks had been noticed soon after completion. “It was only a matter of time,” alleges the complaint, “before this collapse happened.”
Now What?
Ignoring for the moment the fine points of litigation, which Liability insurance company should you notify? Your current carrier? The one who had your policy at the time of the construction? Or both of those, plus every policy you’ve had during the past five years?
Although the correct answer will depend on the nature of the claim and the exact cause of the collapse, the best response at this point would be “all of the above.”
Policy Details Are Very Important
Because Liability policies usually state specifically that they cover damage occurring during the policy period only, you’ll need to ask when the damage actually “occurred.” At the time of original construction — during the time the cracks allegedly appeared and continued to worsen — or on the day the actual collapse took place?
Many courts, when faced with similar situations, have ruled that all three apply. This is what’s called the “Triple Trigger”. The courts held that because the damage had been occurring continuously since the first day of construction, every policy since then should provide a defense. And, if you’re found liable, you’ll have to pay a part of the claim as well.
The Good News
If you’ve been dealing with reputable and skilled insurance providers and your policy has been continuous and reviewed regularly in a constantly changing marketplace, the coverage will be there for you regardless of the “trigger” applied by the courts.
Bottom Line
If you have an experienced and recognized construction insurance specialist helping you, you’ll sleep better at night knowing an expert is watching out for you, even if you’re not fully sure of what you have to watch out for!
