Chinese Drywall: Builders, Subs Face Huge Uninsured Losses

General liability carriers specializing in contractor insurance for builders and drywall subcontractors (subs) are “sweating it out” over the potentially massive claims dollars that could be paid out in litigation, settlement, and adverse jury verdicts arising from Chinese drywall.

However, due to the impact of little known policy exclusions and evolving case law in many states, general liability carriers may escape liability for all or a significant percentage of claims leaving builders and trade subs facing huge uninsured losses and potential bankruptcy.

From the point of view of the homeowner, these claims will not likely be covered by homeowner’s property insurance. And unfortunately to the extent that the damages are not covered by the general liability policies of builders, subs and distributors, homeowners will incur devastating out-of-pocket losses.