General liability insurance

Before any commercial property owner, co-op or condo building allows a renovation project to begin, they require the party who is having the work done provide a Certificate of Insurance naming various parties as additional insureds. That is the easy part. The idea is that if any damage occurs, there will be an insurance company there to handle the expense of any resulting claims. However, the reality of what is typically covered when a claim is actually made varies greatly from what most people "think" will be covered. The average person just thinks all "damage" will be covered. However, the policy is generally meant to cover damage the contractor may cause to others i.e. Not necessarily the party they are doing the work for. In other words, if the contractor sets something in motion which results in damage or a leak to neighbors' apartments, the policy will most likely cover that. However, if the same contractor does something which damages the contractor's own work or the contractor damages existing work by others in the premises; it will most likely not be covered. The principle is that the policy is not intended to cover the contractor's "bad work" or negligence. The tenant, shareholder or unit owner would have to commence a civil lawsuit for breach of contract or negligence rather than look to an insurance policy. There can also be coverage complications because the subcontractor has not given the general contractor indemnification in the contract between them. Just having a signed purchase order is not enough. Also, the subcontractor may be required to give the general contractor a certificate of insurance, but may not have done so for some reason. Bottom line, seek knowledgeable legal counsel before having any construction work done to help ensure that all the i's are dotted and the t's are crossed. C. Jaye Berger is the founder of Law Offices C. Jaye Berger, Manhattan, N.Y.