Construction-defect claims rarely begin in the courtroom. Across jurisdictions such as California, Nevada, Texas, and Florida, most claims are first funneled through statutory pre-litigation frameworks—commonly referred to as “right-to-repair” statutes—that require notice, inspection, and an opportunity to resolve disputes before suit is filed. While these statutes are often viewed as procedural prerequisites, they are more accurately understood as the most consequential phase of the claim life cycle.
For insurance claims professionals, the central takeaway is straightforward: The outcome of a construction-defect claim is frequently determined during this pre-suit “freeze period,” not after litigation begins.
The “Freeze Period” as a Strategic Opportunity
Right-to-repair statutes create what can be described as a structured pause—a window in which litigation is deferred while the parties investigate and evaluate alleged defects. This period is sometimes mistakenly treated as downtime. In reality, it functions as a form of pre-suit discovery and is often the only opportunity to fully assess conditions before they change, deteriorate, or are altered through repairs.
During this phase, claims professionals have a unique opportunity to move from reactive to proactive handling. Rather than responding to pleadings, they can shape the factual record. Rather than reacting to expert opinions, they can help develop them. And rather than defending a fixed narrative, they can influence how the claim is defined from the outset.
The difference between a claim that resolves early and one that evolves into protracted litigation often comes down to how effectively this window is used.
Jurisdictional Frameworks: Different Paths, Same Purpose
Although the underlying concept is consistent, each jurisdiction applies its own version of the right-to-repair process:
• California’s Right to Repair Act establishes a highly structured and procedural framework, with strict timelines governing notice, inspection, and repair offers. Compliance is critical, and failure to adhere to statutory requirements can significantly impact a party’s defenses.
• Nevada’s statutory scheme emphasizes detailed defect disclosures and often incorporates pre-suit mediation, requiring parties to define alleged deficiencies with specificity early in the process.
• Texas takes a different approach, pairing its pre-suit notice requirements with a proportionate responsibility framework that focuses on allocating fault among all responsible parties. This shifts the strategic focus toward early identification of potentially responsible actors and development of allocation evidence.
• Florida’s Chapter 558 process is centered on early inspection and repair opportunities, with a strong emphasis on resolving disputes before litigation. It requires prompt insurer involvement and encourages collaborative investigation among parties. Despite these variations, the core purpose remains the same: to provide a structured opportunity to investigate claims, evaluate liability, and resolve disputes before litigation costs escalate.
Early Expert Involvement: Defining the Claim
One of the most critical components of effective claims handling during the prelitigation phase is the early involvement of qualified experts. Construction-defect claims are inherently technical, often involving complex interactions between materials, design, workmanship, and environmental conditions.
Engaging the right experts—such as building envelope consultants, structural engineers, geotechnical specialists, and cost estimators—allows claims professionals to move beyond generalized allegations and develop a precise understanding of the issues at hand. Early expert analysis can identify the actual mechanism of failure, distinguish between defective work and resulting damage, and define the appropriate scope of repair.
This early clarity has several downstream benefits. It supports more accurate reserve setting, reduces uncertainty in exposure evaluation, and informs strategic decisions regarding repair versus monetary settlement. It also provides a foundation for defensible positions if the claim proceeds to litigation.
Without early expert involvement, claims handling becomes reactive, and the opportunity to shape the narrative is lost.
Identifying Responsible Parties: Expanding the Responsibility Universe
Construction-defect claims rarely involve a single point of failure. Instead, they typically arise from a combination of factors involving multiple trades, design professionals, and, in some cases, maintenance or operational issues.
Early identification of all potentially responsible parties is therefore essential. This includes not only general contractors and subcontractors, but also suppliers, manufacturers, and design professionals. Prompt tender to subcontractors and their insurers, as well as evaluation of additional insured and contractual indemnity rights, can significantly affect the allocation of risk.
This issue is particularly pronounced in Texas, where liability is determined based on proportionate responsibility. Under this framework, a defendant’s financial exposure is directly tied to its percentage of fault. Failure to identify and develop evidence regarding other responsible parties can result in a disproportionate share of liability.
Even in jurisdictions without formal proportionate responsibility statutes, early identification of responsible parties enhances negotiation leverage and supports more equitable resolution of claims.
Aligning Coverage and Defense Strategy
A frequent source of complexity in construction-defect claims is the interaction between coverage analysis and defense strategy. Right-to-repair statutes often allow or encourage repair offers, which can be a powerful tool for resolving disputes early. However, these offers must be carefully coordinated with coverage positions.
An overbroad repair proposal may include work that falls outside policy coverage, creating “betterment” issues or effectively expanding the carrier’s obligations. Conversely, an overly narrow proposal may fail to address the claimant’s concerns, increasing the likelihood of litigation.
Coordination between claims professionals, coverage counsel, defense counsel, and technical experts is essential for ensuring that repair strategies are aligned with policy language and supported by the underlying facts. Clear and timely reservation of rights letters should accompany these efforts, addressing potential coverage issues without undermining the ability to engage in meaningful resolution discussions.
When coverage and defense strategies are aligned, the likelihood of early resolution increases. When they are not, disputes can become more complex and costly.
Reserve Setting: From Speculation to Data-Driven Analysis
The pre-litigation phase also provides an opportunity to move from speculative reserve setting to a more data-driven approach. Rather than basing reserves solely on initial allegations, claims professionals can tie reserve adjustments to key investigative milestones.
Initial reserves may reflect anticipated investigation costs and preliminary exposure. Following inspection and expert analysis, reserves can be refined based on identified defect scope and repair estimates. As repair proposals are developed and claimant responses received, reserves can be further adjusted to reflect the evolving posture of the claim.
This structured approach improves accuracy, enhances internal reporting, and reduces the volatility that often accompanies construction-defect claims.
Common Pitfalls: When the Freeze Period Is Misused
Despite the advantages of the prelitigation process, certain recurring pitfalls can undermine its effectiveness. One of the most common is treating the notice period as a waiting period rather than an active investigation phase. Delayed expert involvement, incomplete inspections, and insufficient documentation can significantly weaken the defense position.
Another frequent issue is the failure to identify and involve all responsible parties early in the process. Missed tender opportunities and delayed indemnity claims can increase exposure and limit options for risk transfer.
Misalignment between coverage positions and repair strategies can also create complications, leading to disputes that extend beyond the underlying defect claim. Finally, inadequate documentation of investigative efforts and communications can hinder the ability to demonstrate reasonableness if litigation ensues.
Each of these pitfalls reflects a broader theme: the failure to approach the pre-litigation phase with the same level of discipline and strategic focus as formal litigation.
OCIPs and Concentrated Risk
Projects insured under Owner-Controlled Insurance Programs (OCIPs) introduce additional complexity into construction-defect claims. By consolidating coverage for multiple parties under a single program, OCIPs reduce traditional risk transfer mechanisms and concentrate exposure within a single insurance structure.
While this can simplify certain aspects of claims handling, it also increases the importance of early strategic decisionmaking. Repair decisions, for example, may directly impact available policy limits across multiple insured parties. Allocation analysis, while still legally relevant, may have different economic implications when a single program funds multiple layers of responsibility.
In this context, the pre-litigation phase becomes even more critical. Early investigation, careful repair strategy, and disciplined reserve management are essential to managing exposure within the constraints of the OCIP structure.
Controlling the Outcome
Right-to-repair statutes were designed to reduce construction-defect litigation by encouraging early investigation and resolution. When used effectively, they can achieve that goal. When misused, they simply delay the onset of more complex and costly disputes.
For insurance claims professionals, the lesson is clear. The pre-litigation “freeze period” is not a pause in the claim—it is the most important phase of it. It is where facts are developed, strategies are formed, and outcomes are often determined.
Those who approach this phase with discipline—deploying experts early, identifying responsible parties, aligning coverage and defense strategy, and documenting their efforts—do more than manage constructiondefect claims. They shape their trajectory and, in many cases, control their outcome.
In an environment where construction-defect litigation continues to evolve, the ability to effectively navigate this pre-litigation window is not simply an advantage—it is a necessity.
About the Authors:
Timothy Dobrenen, Esq. is vice president of claims at Hannover Re Services, USA, Inc. timothy.dobrenen@hannover-re.com
Anthony Gaeta is a partner at Collinsworth, Specht, Calkins & Giampaoli, LLP. agaeta@cslawoffices.com
Mark Van Wonterghem is a principal at B2R Consulting Group. markvw@ b2rconsultinggroup.com
John Toohey is a partner at Bremer Whyte Brown & O’Meara, LLP. jtoohey@bremerwhyte.com