Overview
Construction companies and real estate developers rely on insurance to manage risk. When a subcontractor performs specialized work, proper coverage can be the difference between a manageable claim and a major financial loss.
Garibian Law represented a growing construction and real estate development company involved in a multi-unit residential project. The client required subcontractors to carry appropriate insurance and relied on representations from an insurance broker that coverage was in place.
After excavation and foundation work allegedly caused significant structural damage, the client learned that the policy did not provide the protection it had been led to expect. The insurance carrier denied coverage based on exclusions tied to the very work the subcontractor had been hired to perform.
Garibian Law developed a litigation strategy focused on broker negligence, insurance procurement failures, and the evidence showing that the client had relied on repeated assurances of coverage.
The Client
The client was a growing construction and real estate development company managing a multi-unit residential project.
Because the project involved excavation, foundation work, and structural construction, insurance coverage was a key part of the client’s risk-management plan. The company required subcontractors to maintain appropriate policies and expected to be named as an additional insured when needed.
The client relied on the insurance broker’s confirmation that the subcontractor’s policy covered the work being performed.
The Challenge
The dispute began after a subcontractor performing excavation and foundation work allegedly caused major structural damage at the project site.
The incident led to property damage, engineering expenses, project delays, and related claims. When the client submitted an insurance claim, the carrier denied coverage.
The denial was based on exclusions that removed coverage for the exact type of work involved in the loss.
The client maintained that it had clearly communicated the nature of the construction activities and repeatedly sought confirmation that the policy covered excavation, foundation, and related work. According to the client, the broker reassured the company that proper coverage had been secured and provided documentation confirming coverage existed.
Without legal action, the client faced hundreds of thousands of dollars in potential losses, related claims without insurance protection, and ongoing uncertainty over who was responsible for the coverage failure.
The Strategy
Garibian Law conducted a detailed review of the project records, insurance procurement documents, certificates of insurance, policy materials, written communications, and deposition testimony.
The strategy focused on proving that the broker had enough information to understand the nature of the work but failed to secure the coverage requested.
The firm also focused on showing that the client reasonably relied on the broker’s repeated assurances before allowing the subcontractor to begin work.
This evidence was critical. In insurance broker negligence cases, the details matter. Communications, policy language, applications, and testimony can show what was requested, what was promised, and where the process failed.
The Solution
During discovery, Garibian Law developed a strong evidentiary record. This included written communications, insurance applications, policy documents, deposition testimony, and admissions about the scope of work disclosed during underwriting.
The evidence supported the position that the broker knew about the construction work at issue and that the policy ultimately obtained did not match the coverage the client expected.
After discovery, Garibian Law prepared and filed a comprehensive Motion for Summary Judgment seeking a ruling on liability. The motion argued that the evidence established professional negligence and breach of obligations connected to the insurance procurement process.
This strategy narrowed the dispute, increased pressure on the opposing parties, and positioned the case for a favorable resolution before trial.
The Results
Garibian Law helped the client achieve a favorable resolution without the uncertainty and cost of a full trial.
Key Takeaway
This matter shows the importance of proper insurance procurement in construction. Certificates and verbal assurances are not always enough. The policy must actually match the risk.
When coverage fails, strategic litigation can help businesses pursue accountability and protect their financial interests.
If your business is facing an insurance coverage dispute, construction-related claim, or broker negligence issue, Garibian Law can help you evaluate your rights and next steps.
Past results do not guarantee future outcomes. Every case depends on its own facts and applicable law.
