CONSTRUCTIONDEFECT INSURANCE
DEFECTS SURFACE AFTER THE DEVELOPER LEAVES — THE ASSOCIATION INHERITS THE PROBLEM.
THE PROPERTY POLICY COVERS THE DAMAGE — NOT THE DEFECT ITSELF.
Water intrusion through a defective window seal produces water damage to walls, flooring, and structure. The master property policy covers the resulting water damage. But correcting the defective window — the root cause — is the developer's and contractor's responsibility under their completed operations coverage. The association's D&O policy protects the board's decisions about whether and how to pursue the developer.
The statute of repose creates a hard deadline. Once it passes, defect claims are permanently barred regardless of when the defect was discovered. An independent building inspection before or immediately after developer transition documents defects while warranty clocks are running and preservation of evidence is still possible.
CONSTRUCTION DEFECT — ANSWERED.
WHAT DEFECTS ARE MOST COMMON?
Water intrusion through walls, windows, and roofing. Foundation settlement, balcony failures, plumbing defects, fire suppression errors, and envelope failures. Typically surface two to five years after construction.
DOES THE ASSOCIATION'S INSURANCE COVER DEFECT REPAIRS?
Property covers resulting damage — water damage from a failed seal. It does not cover correcting the defect itself. That is the developer's responsibility under their completed operations coverage.
HOW DOES THE ASSOCIATION PURSUE THE DEVELOPER?
Board decides: litigate, negotiate, or absorb. D&O protects board decisions. Association hires defect attorneys and engineers to document and quantify.
WHAT IS THE STATUTE OF REPOSE?
A hard deadline — typically six to ten years from completion — after which defect claims cannot be filed regardless of discovery date. Missing it permanently bars the claim.
DOES THE DEVELOPER'S INSURANCE COVER REPAIR COSTS?
Developer's CGL with completed operations responds to damage from defective work. Professional liability for design errors. Recovery depends on limits, evidence, and developer solvency.
SHOULD THE ASSOCIATION INSPECT BEFORE TRANSITION?
Yes. Independent inspection documents defects while developer is involved and warranties run. Creates the baseline for claims and identifies immediate issues.
DOCUMENT DEFECTS BEFORE THE CLOCK RUNS OUT.
Kelly Insurance Group structures association programs around the defect exposure and coordinates property, D&O, and transition coverage. Since 1881.
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