How much liability, if any, do general contractors have for faulty construction when subcontractors are also involved in a project? The answer to this question depends not just on the circumstances of the case but also on the state where the project is taking place.
In recent years, Kentucky law has been tougher on general contractors in these cases than other states, which has led some construction law observers to argue the state’s Supreme Court should consider revisiting the issue.
When a general contractor hires a subcontractor, there is always an expectation that the subcontractor will perform its work in a high-quality manner. Shoddy work performed in a negligent way not only creates a higher likelihood of property damage and construction defects, but could also cause significant harm to the general contractor’s reputation.
Unfortunately, Kentucky law is unfavorable to policyholders in some types of construction cases.
In 2010, for example, the Kentucky Supreme Court ruled the faulty workmanship of a subcontractor on a construction project cannot be accidental. This was in the case of Cincinnati Ins. Co v. Motorists Mut. Ins. Co., which set the unusual precedent that in cases involving shoddy construction, general contractors essentially hire a subcontractor with the expectation that the work performed will be subpar.
Other states have repeatedly gotten this issue right over the years, which means it may be time for the Kentucky Supreme Court to take another look at the decision and overturn its ruling. The vast majority of state supreme courts have ruled that faulty workmanship can be (and typically is) accidental, which means it’s considered a covered “occurrence.”
When the Kentucky Supreme Court issued its Cincinnati ruling, it pointed to several other states that applied similar rules. Five of those states — Arkansas, Colorado, North Dakota, South Carolina and West Virginia — now apply the opposite rule in these cases.
This is an issue that will not be resolved until the state courts take it up again. Until then, consult a trusted Kentucky construction law attorney at Hemmer DeFrank Wessels, PLLC to learn more about this issue.