Insurance Companies Looking for Ways to Deny Claims Associated with Toxic Chinese Drywall
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The devastating effects of toxic Chinese drywall in Virginia (VA) have left numerous families with a home featuring unlivable conditions or a massive bill to remove and replace the lethal drywall material. It’s also forced many contractors and subcontractors to go out of business.
My colleague Rick Shapiro has written about the health hazards associated with Chinese drywall and the ramifications of this situation are far reaching, both legally and financially.
Here’s a video illustrating the extent to which toxic Chinese drywall has effected so many people…
Unfortunately, insurance companies are already contemplating a strategy to avoid paying for home repairs or reimbursing contractors and subcontractors who also face major financial claims from lawsuits.
A recent article in the Insurance Journal discussed methods for insurance companies to avoid financial responsibility. The two primary exclusions they hope to utilize in legal defense include a pollution exclusion and property damages exclusion.
According to the article, the pollution exclusion could be used since a majority of contractors and subcontractors possess general liability policies which feature a standard exclusion for liability arising from the "actual, alleged or threatened discharge, seepage, release or escape of pollutants."
They argue the toxic gases emitted by the Chinese drywall will fall under this provision since "pollutants" are usually defined as any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste."
The property damages exclusion is usually entitled "Exclusion: Damage To Work Performed By Subcontractors On Your Behalf" in the policy. This basically eliminates property damage liability for damage associated with the builder's faulty work, the Chinese drywall in this case.
In addition, they argue liability can be denied for the resulting damage to the builder's non-faulty work including the effects of the toxic Chinese drywall in the home such as corrosion to electrical systems, copper piping, and other metals.
The litigation associated with Chinese drywall is probably going to be extensive and its clear insurance companies will look for numerous legal defenses and exclusions to avoid financial responsibility.
About the Editors: Shapiro, Cooper Lewis & Appleton personal injury law firm is based in Virginia (VA), near the NE North Carolina (NC) border and handles car,truck,railroad, and medical negligence cases and more. Our lawyers proudly edit the Virginia Beach Injuryboard, Norfolk Injuryboard, and Northeast North Carolina Injuryboard as a pro bono public information service. Lawyers licensed in: VA, NC, SC, WV, DC, KY.
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