Invalid Insurance Leads to Lawsuit in Building Collapse

Expired insurance policy

Expired policy and misrepresentation end in disaster for contractor

Six people were killed and another 14 were injured as the result of a building collapse in Philadelphia on June 6, 2013. A neighboring Salvation Army thrift store was also crushed.

In February, the fallen building’s owners were granted a demolition permit with the intention of removing the building in its entirety.   Griffin Campbell Construction was listed as the primary contractor.

Lawsuits Filed

In the aftermath of the devastation caused by the building collapse, several lawsuits have been filed against Campbell by the injured parties and the contractor’s own insurance company, Berkley Assurance Co. of Iowa.

Berkley alleges that Campbell misrepresented both his own history and the details of the upcoming demolition. Additionally, Campbell failed to pay a premium on his insurance policy causing its expiration on May 1. Berkley has filed an action in Philadelphia Common Pleas Court with the intention of confirming that Campbell’s policy was canceled or void at the time of the collapse.

Honesty and diligence to details could have prevented disaster

Some contractors may be tempted to paint a more favorable picture on their insurance application by embellishing their experience and qualifications or by omitting critical information about their loss history.  This can result in the policy being rescinded due to fraud on the application.  In addition, some contractors allow their policy to periodically go into cancellation mode due to failure to pay a monthly premium in a timely fashion.  Both of these mistakes can have disastrous consequences for a contractor and their contractor’s General Liability.

Source: Insurance Journal

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