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Contractor Workmanship

When a loss happens during or soon after work on the property, look at the contractor first. Timing is your best clue. A leak the week after a remodel or a fire on the day the roofers were torching is rarely a coincidence. The contract is your most important document, because it can create the claim or waive it.

What it coversPlumbers, roofers, hot work, electricians, oily rags, contract waivers, statute of repose

Step-by-step checklist

Identify

Contact the claim adjuster right away. Ask them to hold the scene and for permission to retain an expert at the client's expense. Note the call in the file.
On every claim, ask the client whether they want an origin and cause investigator to review the scene, or confirm one is already assigned. Note their answer in the file so the decision is on record.
Make sure no evidence is touched or moved until the expert has secured the scene
Get the client's approval for the scene exam cost. Most run at least $1,600 with travel, the day rate, and expenses.
Build a timeline of the work and the loss
Get the contract, scope of work, invoices, and permits
Check the contract for a waiver of subrogation before spending on experts

Hands off until the expert arrives. Nothing at the scene gets touched, moved, repaired, or thrown out until the origin and cause investigator has secured it. Evidence that's moved early can sink the whole recovery.

Notify

Get certificates of insurance for every contractor
Notify the general contractor, every subcontractor, and their carriers
Secure the failed component, like the fitting, joint, or rags

Investigate

Hold a scene exam before repairs
Roof loss? Pull the weather forecast. Hot work? Ask for the permit and fire watch.
Lab-test failed components, then review the expert's report
Check the statute of repose on older work

Demand

Review payments and out-of-pocket costs
Sort the supports into photos, estimates, invoices, and reports
Send the full demand packet

Negotiate

Keep every contractor on notice until fault is sorted out
Follow up, and use a tolling agreement if the deadline is close
If liability is accepted, negotiate. If not, review for ADR.

Settle

Review the release, and make sure it doesn't free the other contractors
Receive payment, issue the deductible and client payments
Final file review, then close

1. Identify

Common contractor losses by trade

Trade	What goes wrong
Plumbers	Failed solder joints or fittings after a repair or remodel, fittings left loose, lines not tested under pressure
Roofers	Roof left open or poorly tarped before rain, and torch-applied roofing starting fires
Any hot work (welding, soldering, torching)	Fires from sparks or heat, especially with no fire watch after the work stopped
Electricians	Loose connections, wrong wire size, overloaded circuits, work done without a permit
Floor refinishers and painters	Oily rags from oil-based stains and finishes that spontaneously combust when balled up or left in a pile
Drywall and trim carpenters	A screw or nail driven through a water line, found days or weeks later
Excavators and landscapers	Broken water, sewer, or irrigation lines, and damage to foundations
Movers and delivery crews	Damaged structure or appliances, and disconnected or damaged water lines

Responsible parties to consider

The general contractor
Every subcontractor who was on site. The general contractor may not have done the work that failed.
A property manager or HOA that hired the contractor
The manufacturer, if the contractor installed a defective product (see the product guides)

Timing is your first clue

Build a timeline right away: when the work started, what was done each day, who was there, and when the loss happened. A loss during the work or shortly after it points strongly at the contractor.

2. Notify and investigate

Get the contract first

The contract tells you who did what, and whether the claim is even allowed. Look for:

The scope of work, so you can tie the failure to what the contractor was hired to do
A waiver of subrogation. Many construction contracts, including common industry forms like the AIA contracts, include one. It can block the claim entirely, so find it before you spend money on experts.
Limitation of liability and indemnity clauses
Insurance requirements

Who to put on notice

The general contractor and every subcontractor
Their liability carriers. Ask for a certificate of insurance, which is often in the insured's file or the contractor's bid.
The manufacturer, if a product may have failed

Evidence checklist

Contract, change orders, invoices, and scope of work
Building permits and inspection records
Certificates of insurance for every contractor
A timeline of the work, and who was on site each day
Photos of the work area before any repairs
The failed component, such as the fitting, joint, or rags
Weather records for roof losses, showing whether rain was forecast when the roof was left open
Texts and emails between the insured and the contractor

Hot work fires

Hot work is covered by NFPA 51B, the fire prevention standard for welding, cutting, and other hot work. Ask whether the contractor had a hot work permit, a fire watch during and after the work, and fire extinguishers on hand. Missing any of these helps show negligence.

Exams

Use a scene exam before repairs, and a lab exam for failed fittings or components. Notify every contractor and sub. They'll each want their own expert there.

3. Demand, negotiate, and settle

Liability theories

Negligence in performing the work
Breach of contract, and breach of the warranty of workmanlike performance
Code violations, which some states treat as evidence of negligence or negligence on its own

Defenses to expect

Defense	How to answer it
Contractual waiver of subrogation	Read it closely. Some waivers only cover the work itself or only the construction period, not later losses or other property.
Statute of repose	Construction repose periods often run around 7 years from substantial completion, and vary by state. Check early on older work.
It was the other contractor	Keep every contractor on notice until the experts sort out whose work failed.
The owner directed the work	The contract and scope of work. The contractor is still responsible for doing it correctly.
Limitation of liability clause	Check whether it applies to negligence and whether the state enforces it.
Economic loss doctrine	Some states limit claims to the contract when the only damage is to the work itself. Damage to other property is usually still recoverable.

Negotiating and settling

Contractors' liability carriers will often tender to each other. Keep the pressure on all of them.
On larger losses, expect the carriers to hire coverage counsel. Stay on deadlines, and use a tolling agreement if needed.
Review the release with the release checklist. Make sure one contractor's release doesn't let the others off.
Close with the standard closing letter and the deductible reimbursement letter.

4. Letters for this loss

Step	Letter	Sent to
Identify	Subrogation Opening Letter to Insured	Insured: contract, invoices, texts, photos
Notify	Notice of Subrogation Interest and Insurance Request	General contractor and each sub
Notify	Notice of Subrogation Interest to Adverse Carrier	Each contractor's carrier
Investigate	Evidence Preservation and Joint Scene Exam Notice and to Responsible Party	All contractors and carriers
Investigate	Joint Lab Exam Notice	All parties
Demand	Subrogation Demand to Adverse Carrier or to Responsible Party	Carrier, or an uninsured contractor
Negotiate	Second Demand with Escalation Notice, Tolling Agreement Request	Carrier(s)
Settle	Release Review Checklist, Closing (Made Whole) or Pro Rata, Deductible Reimbursement	Client and insured
No recovery	No Recovery Closing Letter	Client, for example when a contract waiver applies

Sources