In the complex world of construction, the general contractor (GC) plays a pivotal role in shaping the trajectory of a project, from inception to completion. However, their influence extends beyond the build itself, reaching into the realm of insurance and construction-defect claims. For insurance claims professionals, attorneys, risk managers, and experts, understanding the GC’s role in risk management, quality assurance/quality control (QA/QC), and proactive engagement with experts and responsible subcontractor trades is essential to evaluating and mitigating claims related to construction defects. This article explores how GCs can either prevent or contribute to investigation and resolution of construction-defect claims, and what that means for the insurance industry.
The Role of the GC
GCs are the linchpin of construction projects. One of their first steps is to communicate with the owner. Whether constructing a skyscraper office building, multifamily development, or a hospital, all construction benefits with well written and documented communication with the owner. If a new homeowner buys a townhome and does not anticipate that stucco cracks, or if a building owner is unaware of the level of maintenance required, warranty and construction-defect allegations could arise.
GCs also coordinate subcontractors; manage schedules; oversee budgets; and partner with designers, subcontractors, inspectors, and owners to ensure compliance with design specifications and building codes. The GC’s decisions and oversight directly impact the quality and integrity of the final product. Because of this central role, GCs are often the first party named in defect allegations and insurance claims.
When an allegation of a defect arises—whether it is water intrusion, structural failure, or HVAC inefficiencies—the GC is typically the first responder. Their documentation, communication, and QA/QC protocols become the foundation upon which claims are evaluated and can lead to early settlement. The GC’s policies, practices, and responses can either clarify or complicate the path to resolution.
Risk Management Strategies for GCs
Effective risk management begins long before ground is broken. GCs that integrate risk management principles into every phase of the project are better positioned to avoid defect allegations. Key strategies include:
• Contractual clarity. The contract is the first line of defense and is the guidebook when it comes to navigating claims resolution. Clearly defined scopes of work, responsibilities, payment, and dispute resolution, as well as insurance and indemnification requirements, help delineate liability and reduce ambiguity. These provisions should be reviewed and updated regularly to reflect evolving project conditions and regulatory requirements.
• Subcontractor vetting. GCs must ensure that subcontractors are not only licensed and adequately insured, but also that they demonstrate a history of quality workmanship, financial reliability, strong safety practices, and responsive warranty service. Prequalification processes, reference checks, and performance reviews are also essential tools in this vetting process. Additionally, building solid relationships with subcontractors fosters trust and respect, helping resolve claims more efficiently.
• Clear and consistent documentation protocols. Maintaining thorough records of inspections, communications, submittals and approvals, requests for information (RFIs), Change Orders (COs), Designer Clarifications (DCs) and site conditions protects the GC and all parties involved in the event of future disputes. Digital platforms and construction management software can streamline this process, ensuring that records are accessible and organized.
• Safety and compliance audits should be conducted regularly. These audits verify adherence to building codes, safety standards, and project specifications. Third-party audits can add an additional layer of objectivity and credibility. Many insurance carriers perform regularly scheduled risk assessments on site for their insureds. It is meant to be a collaborative tool to provide valuable insight into what is going well and what needs improvement at the project. Subsequent visits provide accountability and documentation for the areas of concern that have been addressed.
QA/QC
A GC with robust protocols is less likely to be the root cause of a construction defect. QA and QC are not interchangeable. QA is proactive, focusing on preventing defects through planning and process control. QC is reactive, involving inspections and testing to identify and correct issues. GCs must implement both QA and QC measures to ensure construction integrity:
• QA measures include pre-construction meetings to align expectations, detailed work plans and checklists, and training programs for crews. These initiatives foster a culture of accountability and continuous improvement.
• QC measures involve routine inspections and testing, punch lists, and corrective actions. Third-party verification, such as commissioning agents or specialty consultants, can provide independent assessments of system performance and installation quality.
Emerging technologies are enhancing QA/QC capabilities. Drones, 3D scanning, and AI-powered analytics are being used to monitor progress, detect anomalies, and validate compliance. These tools not only improve accuracy but can also reduce the time and cost associated with traditional inspection methods.
Mitigating Construction Defect Claims
One of the most effective ways GCs can mitigate future claims is by engaging third-party experts before project completion. This is especially critical in high-risk areas like the building envelope, where water intrusion and thermal inefficiencies are common sources of claims. Engaging experts early provides objective evaluation. Independent experts offer unbiased assessments of workmanship and compliance, identifying potential issues that may be overlooked by internal teams.
Furthermore, early detection is key. Identifying issues before occupancy allows for timely remediation, minimizing disruption and cost. For example, infrared thermography can detect moisture intrusion or insulation gaps that are not readily visible to the naked eye.
Building Information Modeling (BIM) is also an effective means to detect construction defects before they occur. Simulating the construction sequencing before it’s built can help identify issues with design errors, installation challenges regarding different options for sequencing, as well as means and methods, and/or safety hazards.
When a warranty request arises, the GC’s response can set or change the tone of the relationship between the owner and the GC. Prompt, transparent, and well-documented responses can facilitate effective communication and potentially limit a construction-defect allegation.
Effective Response to Defect Claims
When an allegation of a construction defect arises, the GC’s response via counsel sets the tone for the claim process. Legal and insurance coordination is vital. Engaging legal counsel and notifying insurers promptly ensures that coverage issues are addressed and that the GC’s interests are protected. A proactive GC can be a valuable ally in resolving claims efficiently.
An effective response begins with review and investigation. Assessing the validity and scope of the allegation is critical. This may involve site visits, interviews with personnel, review of project documentation and insurance, and/or retention of experts.
Stakeholder communication is essential. Coordinating with subcontractors, design professionals, and/or insurers ensures that all parties are informed and aligned. Clear communication helps manage expectations and fosters collaboration.
Determination of cause and origin and remediation planning should be strategic and comprehensive. Developing and potentially implementing corrective measures requires input from technical experts, cost estimators, and legal advisors. The goal is to resolve the issue efficiently while preserving project integrity.
Case Examples
Consider a mid-rise condominium project in a coastal region, where moisture intrusion is a common concern. The GC, aware of the risks, engaged a building envelope consultant during the framing phase. The consultant identified several areas where flashing details were insufficient and recommended changes. The GC, in connection with the responsible designer and subcontractor(s), implemented the recommendations, documented the changes, and conducted follow-up inspections. Upon project completion, the consultant issued a final report confirming compliance.
Two years later, a unit owner reported water stains. The GC provided the consultant’s report, inspection records, and photos of the corrected work. The insurance claim was quickly resolved, with the root cause traced to a weather and maintenance issue unrelated to the original construction. This case illustrates how pre-suit expert engagement and thorough documentation can deflect liability and expedite claim resolution.
Another example involves a commercial office building experiencing HVAC inefficiencies post-occupancy. The GC had implemented a commissioning process during construction, engaging a mechanical engineer to verify system performance. The commissioning report identified calibration issues with the control system, which were corrected prior to turnover.
When the building owner later alleged defects, the GC presented the commissioning documentation and service records, demonstrating that the systems were functioning as designed. The claim was redirected to the building operator, who had failed to maintain the equipment.
The Role of Subcontractors
Subcontractors also play a pivotal role in either supporting or undermining a construction-defect claim. Their workmanship, adherence to specifications, and responsiveness to quality control measures directly influence the integrity of the finished product. A well-managed subcontractor team that follows established protocols and communicates effectively can provide critical documentation and testimony that supports the GC’s defense in a claim. Conversely, subcontractors who deviate from plans, ignore QA/QC procedures, or fail to document their work can introduce vulnerabilities that complicate liability assessments and increase exposure.
GCs are more than project managers; they are gatekeepers of quality and risk. Their practices in risk management, QA/ QC, and litigation management shape the outcome of defect allegations and insurance claims.
Ultimately, where claims begin is often where construction begins—with the GC. Ensuring that this starting point is grounded in best practices can make all the difference in resolving constructiondefect allegations.
About the Authors:
Maren Mooney CRIS, ACP, CLMP is director, claims at Turner Surety and Insurance Brokerage, Inc. mmooney@ tsibinc.com
David S. Harrigan is a senior partner at Luks, Santaniello, Petrillo, Cohen & Peterfriend. dharrigan@insurancedefense.net
Donna Friis, PE is principal at Walter P Moore. Dfriis@walterpmoore.com