During storm season, there are plenty of insurance claims involving property damage caused by storms. But what about the situations where the storm should not have caused the damage – when the damage never would have happened if not for faulty construction?
How do you protect your property investments against faulty construction? In some cases, storms are the triggering event, and sometimes the general coverage will take care of it, but plenty of instances involve bad construction that simply fails. Roofs collapse, stairways fall apart and foundations prove faulty. As a property owner or developer, you need to know how to protect your financial interests in construction agreements.
Protecting your interests against faulty construction
There are three primary ways you can protect your investment against negligent or faulty construction:
- Insurance: For property owners and developers, it is obvious that you need general property insurance against storms and general damages. However, there are also specific insurance packages to protect you against third-party errors like design and construction defects.
- Contractual language: Using carefully considered contractual language can help insulate you against having to absorb the costs if your property has been poorly designed or constructed.
- Litigation: In some cases, you have no other choice but to bring a lawsuit against the responsible party. A third-party settlement or verdict could cover the costs you have incurred for their errors.
While none of these options are simple, they are critical to making sure you don’t absorb the costs of other people’s mistakes.
There are no guarantees in the real estate development business or in any other business requiring commercial property transactions. In fact, real property is among the most complicated, costly and risky transactions.
But working with an experienced legal team, utilizing smart risk-assessment strategies and moving forward carefully can help you ensure that you protect your interests and get the best outcome possible. In cases where errors have already been made, the best thing you can do is fight aggressively to avoid having to pay for errors on the part of a construction contractor or subcontractor.