The facts
The construction crew from D. Berry & Son Custom Homebuilder were weeks away from completing the construction on a new custom home. As they arrived to the project site one morning, they discovered about two inches of sewer water throughout the house. The city’s water and sewer authority was called immediately to assess the situation and it was determined that a discharge of water from a blocked sewer line caused the damage. A water restoration company was hired to clean up the water and help minimize any further damage. After a thorough inspection of the project, the crew discovered that the newly installed carpet was saturated with water and the Italian terrazzo flooring was partially damaged. Due to the extent of the damages, the terrazzo flooring had to be repaired and all of the carpet had to be replaced. Luckily, the flooring distributor was able to meet the emergency request by D. Berry & Son Custom Homebuilder without incurring additional expenses. However, to meet the upcoming closing date, the construction workers and subcontractors had to work overtime to make the appropriate repairs and finish the construction on time.
The result
The cost to replace all the carpet and repair the flooring totaled $5,000. The overtime wages incurred by the construction crew to complete the repairs and finish the construction on time cost the builder an additional $13,000.
The remedy
With Victor’s Builders Risk comprehensive coverage form, the insured had the following proper coverages in place:
- Back up, sewer and drain coverage, with a sublimit of $5,000 and no deductible, covered the water damage repairs and expenses incurred from the water restoration company.
- Soft cost coverage with a $50,000 sublimit covered all overtime expenses necessary to repair the damages and meet the closing date deadline.
Risk factors
Risk factor #1
Run a complete assessment of the land prior to the start of construction. Make sure all sewers and drains are clear and up to code.
Risk factor #2
Soft cost coverage will cover most, if not all, overtime expenses incurred as a result of a delay caused by a covered loss.
