Attorney’s Fees in Underlying Construction Defect Action Recoverable Against CGL Insurer

Good news for third-party claimants in construction defect cases.  A new Florida case held that a CGL insurer is liable for an attorney’s fees judgment entered against an insured contractor in a construction defect case.

In this case, the owner sued its contractor for construction defects.  The owner prevailed and received an attorney’s fees judgment.  The CGL policy provided that the insurer will pay the costs taxed against its insured in a  suit.  (Most CGL policies contain this standard language.).  The court held that “costs” could be construed to include attorney’s fees as the insurer could have defined such costs to exclude attorney’s fees, but did not.  Hence, the owner was entitled to its attorney’s fees against the CGL insurer!

What does this mean?  If you are an owner suing an insured contractor or subcontractors in a construction defect case, you now have an argument to recover your attorney’s fees judgment against that party’s CGL insurer.  And, if you are a contractor suing a subcontractor, you have an argument (outside of any additional insured argument)  to recover your attorney’s fees judgment against that subcontractor’s CGL insurer. In other words, attorney’s fees are a recoverable component of your damages!




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