The insured was contracted to provide a natural grey concrete floor in a residential dwelling.  When the floor was inspected the Insured’s customer advised the finish did not meet their expectations and believed the finish would have a negative effect on the current and resale value of the house.  The customer sought compensation from the Insured for their perceived financial loss.    The insured advised BIA they agreed with their customer and the floor finish did not comply with their expectations.  The difficulty, in this case, was the floors weren’t revealed until most of the house was completed (and couldn’t be replaced).  BIA worked closely with the Insured and their customer to achieve an agreed settlement.

This claim provides a great example of the difference between a construction professional’s (engineers/architects/project manager) professional indemnity insurance policy and design & construct professional indemnity insurance policy.  This type of claim would not be covered under a standard construction professional’s professional indemnity insurance policy which generally excludes claims relating to the sale, manufacture, installation, construction, alteration, repair, servicing or treating of any goods.  The claim would also not be covered under a public and products liability policy as there has been no bodily injury or property damage.