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The work of a general contractor is difficult work.  Projects don’t always go as planned.  There are times where non-defective finished work must be destroyed in order to get to defective work that needs to be repaired.  This is what is referred to as rip and tear costs, because the finished work must be ripped out in order to access the damaged portion of the job.  A prime example of this would be trying to access a leaky pipe located behind a completed wall.

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Typically it is the view that commercial general liability, or (CGL), will cover this type of issue because the rip and tear costs are a result of property damage, however, in recent times, construction defect claims have spurred a debate limiting the amount of coverage contractors receive for this type of situation.  By considering the following few questions, a contractor will be able to make a better case for their rip and tear coverage, lowering the costs covered out of pocket.

Is the rip and tear the only property damage or is there already existing property damage?

If there has already been damage to the property as a result of the defective work, then rip and tear will just be considered a repair expense.  This means it will be covered by your general liability insurance.  If the defective work has yet to create secondary property damage then coverage will be much harder to get.

Is an “occurrence” the reason for the rip and tear costs?

Depending on where you are located, rip and tear operations are considered intentional property damage, something that is not accidental, nor covered by the commercial liability insurance policy.  In situations such as this the contractor must prove the rip and tear was part of repair expenses and not an intentional property damage.

What if my policy expires?  Will rip and tear be covered?

Insurance companies will sometimes use policy expiration dates to deny coverage to contractors who must repair property damage that occurred during the policy period, such as defective installation of pipes, but did not need to be repaired until a later date, when they sprung a leak.  Be sure to explain that the rip and tear was necessary but that you would only do it if needed, at which point it was necessary.  Even though the policy expired, the defective work was already done and therefore the rip and tear should be covered.

These questions help to outline possible situations a contractor must face when dealing with rip and tear coverage.  Protect yourself at all times by having the right commercial liability coverage insurance, and be knowledgeable about how it applies to your contracting business.  These basic questions could help you identify whether or not rip and tear will be covered, and help save you out of pocket expenses.


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