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Insurance bad faith and insurance coverage law firm in Colorado

As seen in the Denver Post

Ruling Reinforces Homebuilders
By: Margaret Jackson

Companies that insure home builders during construction of a home are liable for defects discovered by owners after the original buyer sells it.

In a 2-1 decision, the Colorado Court of Appeals on Wednesday sided with Englewood-based Village Homes, which was sued in April 2000 by three homeowners alleging Village Homes was liable for construction defects related to expansive soils. In July 2001, a fourth homeowner sued Village Homes on the same basis.

Village Homes submitted the cases to its insurance company, Travelers Casualty and Surety Co. and Travelers Casualty Co. of Connecticut, which denied coverage.

The decision requires that insurance companies pay the home builders' legal defense costs and damages caused by defects in construction.

"For homebuilders across the state, this is an important victory, making sure that when they buy insurance protection, that protection is there when these claims are made," said Brad Levin, an attorney with Denver-based Roberts Levin & Patterson, which represented Village Homes.

Homeowners have two years after the damage manifests itself to file a lawsuit and cannot file a claim more than six years after the home has been completed.

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