Louisiana Legislature Enacts Act 932 – Significant Changes to Insurer Bad-Faith Exposure for Failure to Settle
July 13, 2026 —
Tabitha R. Durbin & Jennifer E. Michel - Lewis BrisboisThe Louisiana Legislature has enacted Act 932 (formerly House Bill 1162), which became law this week without the Governor's signature pursuant to the Louisiana Constitution, after expiration of the applicable constitutional review period. Act 932 makes several important amendments to Louisiana's insurer bad-faith statute and appears intended, at least in part, to address issues arising from the Louisiana Supreme Court's decision in Kelly v. State Farm Fire & Casualty Co., 169 So.3d 328 (La. 2015). The Act also makes changes regarding claim payments involving licensed contractors. The Act takes effect on August 1, 2026.
Key Takeaways
Act 932:
- Limits certain bad-faith causes of action (bad faith failure to settle) involving personal injury and bodily injury claims where good-faith disputes exist or where an insurer has not been afforded sufficient opportunity to respond to a settlement demand.
- Requires insurers and adjusters to verify a contractor's Louisiana license status before issuing claim payments when a contractor is named as a payee on a check for repair or restoration of immovable property.
- Creates a statutory safe harbor protecting insurers from bad-faith penalties and attorney fees when payment delays result from an inability to verify a contractor's license, provided specified documentation and notice requirements are met.
Reprinted courtesy of
Tabitha R. Durbin, Lewis Brisbois and
Jennifer E. Michel, Lewis Brisbois
Ms. Durbin may be contacted at Tabitha.Durbin@lewisbrisbois.com
Ms. Michel may be contacted at Jenny.Michel@lewisbrisbois.com
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Insured Does Not Prevail on Summary Judgment Motion Invoking Ensuing Loss Provision
May 05, 2026 —
Tred R. Eyerly - Insurance Law HawaiiThe court denied the insured’s motion for summary judgment finding genuine issues of fact regarding implication of the policy’s ensuing loss provision. Stella Prop. Dev.. & Event Productions, LLC v. Auto-Owners Ins. Co., 2026 U.S. Dist. LEXIS 15854 (W.D. Pa. Jan. 28, 2026).
Stella owned a cultural center that was insured under a commercial property all-risk policy issued by Auto-Owners. A windstorm with gusts of 65 miles per hour struck the Center causing damage. The Center’s inspector found extensive wind damage on nearly all facets of the roof. Further, the inspector found the existing organic shingles were in “very poor condition” and were “defective, discontinued, and no longer available.” The estimated cost of repairs to the roof was $108,010.52.
Read the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
California Poised for the Most Significant Residential Construction Defect Reforms in Decades
September 01, 2026 —
Thomas D. Fama & Andrew J. Mallon - Wood Smith Henning BermanThe California Legislature is considering legislation that would dramatically alter the landscape of residential construction defect litigation. Assembly Bill 1903, currently pending before the Senate Judiciary Committee, proposes extensive amendments to California's Right to Repair Act (Civil Code sections 895-945.5) that would substantially strengthen procedural protections for builders while narrowing the scope of recoverable construction defect claims.
If enacted, the legislation would affect virtually every stage of a construction defect dispute- from the initial notice of claim through litigation and settlement- and would introduce an entirely new certification process for newly constructed condominium projects. This article details some of the most significant proposed changes.
Higher Burden for Construction Defect Plaintiffs
Perhaps the most consequential change is the bill's modification of the proof required to establish liability. current law generally requires a claimant to demonstrate the residence fails to satisfy one of the statutory performance standards established under the Right to Repair Act. AB1903 would instead require claimants to establish three separate elements:
- A violation of an applicable statutory performance standard;
- The violation caused appreciable, present, non-speculative physical damage to another building component; and
- The violation resulted from the original construction.
Reprinted courtesy of
Thomas D. Fama, Wood Smith Henning Berman and
Andrew J. Mallon, Wood Smith Henning Berman
Mr. Fama may be contacted at tfama@wshblaw.com
Mr. Mallon may be contacted at amallon@wshblaw.com
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Emerging Issues in Construction CGL Insurance Part 2: The Separation of Insureds and Additional Insured Interests
September 29, 2026 —
Eric M. Clarkson - SDV FenchurchMany coverage disputes hinge on first principles—the fundamentals of insurance —rather than the minutiae. Unfortunately, the basic anatomy of insurance policies can get lost sometimes when parties are laser-focused on a particular term or set of circumstances. This is true not just in disputes, but also when writing coverage. One of the fundamentals that is commonly misunderstood and overlooked—but which is absolutely critical to the intended operation of insurance coverage—is what is commonly known as the “separation of insureds.”
The “separation of insureds” is the concept that each “insured” under a policy are referred to and treated differently, and most of all that the distinctions matter. The concept is usually included as a condition in the policy. It embodies the requirement that the policy applies to each insured distinctly from how it applies to other insureds. The ISO Form CGL policies specifically state that they apply “[s]eparately to each insured against whom a claim is made or ‘suit’ is brought.” The separate and distinct treatment of insureds is more critical in construction operations than anywhere else. This distinction is essential to ensure coverage works as intended, especially when contracted operations are involved, because the policy must insure the subcontractor that purchased the policy, the general contractor who hired the subcontractor, and the owner that hired the general contractor. Even small modifications can easily frustrate the intent of the parties.
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Eric M. Clarkson, SDV FenchurchMr. Clarkson may be contacted at
eric.clarkson@sdvfenchurch.us
Potential Gap in Workers Compensation Immunity Statutory Framework
June 02, 2026 —
David Adelstein - Florida Construction Legal UpdatesWorkers compensation insurance is important. As an owner, you want to ensure the contractors you hire have workers compensation insurance. Assuming you hire a contractor that is statutorily exempt from workers compensation, you want to make sure, no exception, that any subcontractor that is hired has workers compensation insurance. (Regardless, you always want subcontractors to have workers compensation insurance.). In construction, the prime contractor serves as the “
statutory employer” for purposes of workers compensation insurance.
With workers compensation comes
workers compensation immunity.
Read the full story...Reprinted courtesy of
David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
GRSM Secures Illinois Appellate Victory for Architectural Firm in Implied Warranty Dispute
May 14, 2026 —
Gordon Rees Scully MansukhaniGordon Rees Scully Mansukhani Partner Jonathan Federman, Partner Thomas Cronin, and Senior Counsel Garrett Lee recently secured a victory in the Illinois Appellate Court, Fifth District, on behalf of the firm’s client, an architectural firm, in a liability dispute.
The case arose following an entity’s purchase of a 111-unit building for use as an investment or rental property. The plaintiff made claims against the architect of the building, alleging that there were design defects that breached an implied warranty, as well as a negligence claim.
GRSM argued that an architect could not be liable for implied warranties, particularly for an implied warranty which no Illinois court has ever recognized. GRSM further argued that Illinois law bars an architect from liability for negligence arising from a duty pursuant to contract under the economic loss doctrine.
Read the full story...Reprinted courtesy of
Gordon Rees Scully Mansukhani
Real Estate & Construction News Roundup (4/1/26) – President Trump’s EO Affects Federal Funding, Fannie Mae Accepts Crypto-Backed Mortgages, Private Sector Construction Weakness Offsets Public Sector Gains
April 08, 2026 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogIn our latest roundup, California to pursue office-to-housing conversions, hoteliers to increase investment in artificial intelligence, private credit exodus to boost commercial real estate capital, and more!
- President Donald Trump’s executive order to remove regulatory barriers to affordable home construction could affect federal funding for cities and states that don’t follow what the order calls “regulatory best practices,” including faster permitting, fewer green building mandates and relaxed limits on exurban development. (Robyn Griggs Lawrence, Multifamily Dive)
- California state policymakers have been pursuing policy changes that remove barriers to converting older commercial buildings into housing. (Keith Loria, Construction Dive)
- Private sector weakness largely offset modest gains in public construction spending, despite data center gains. (Sebastian Obando, Construction Dive)
Read the full story...Reprinted courtesy of
Pillsbury's Construction & Real Estate Law Team
Beyond the Storm: How Non-Hurricane Catastrophes Expose Florida’s Construction Defect Blind Spot
August 11, 2026 —
Franchesco “Frank” Soto & Amanda L. Gonzalez - Ball JanikOn June 8, 2026, a magnitude 6.1 earthquake struck the Gulf near the coast of Cuba, the largest instrumentally recorded earthquake in the Gulf since seismic monitoring began in 1950. Buildings swayed, offices were evacuated, and many residents along the east coast of Florida, from Miami-Dade to Jacksonville, felt the ground shake. Although no tsunami followed and reported structural damage was limited, this event exposed a blind spot that Florida property owners, developers, and their counsel cannot afford to ignore: catastrophic stress on Florida buildings does not always come in the form of a named storm.
Florida property owners have grown accustomed to preparing for wind, storm surge, floods, and torrential rain. Far less attention is paid to earthquakes, sinkholes, tornadoes, hail, and non-tropical flooding, each of which can place unexpected stress on buildings not designed with those forces top of mind and can trigger deficiencies in buildings that were not otherwise known, expose design failures, and create an urgency for both insurance claims and subsequent litigation.
Non-Hurricane Triggers of Latent Defects
Seismic activity is the clearest example. Florida’s building code accounts for wind loads, not seismic forces, meaning even a moderate earthquake can reveal weaknesses in curtain wall systems, structural connections, or foundations that were already marginal. Sinkholes, driven by Florida’s karst limestone geology, remain a persistent threat, particularly in Central Florida, where subsurface voids can undermine foundations without warning. Non-tropical flooding, like the record rainfall that flooded South Florida in June 2024, can intrude through building envelopes and waterproofing systems that were never stress-tested for such volumes of water. Tornadoes and hail, while more localized, can cause roofing and envelope failures that mimic, mask, or trigger latent construction defects.
The Litigation and Coverage Disputes That Follow
When one of these events strikes a building already carrying undisclosed or unresolved construction defects, the resulting disputes become considerably more complex. Property owners and associations must move quickly to document existing conditions and distinguish damage caused by the event from pre-existing defective construction, the same causation issue that arises in the hurricane context under Chapter 558, but often without the benefit of established precedent or adjuster experience with these less common events.
Insurance coverage disputes frequently follow close behind. Carriers may dispute whether an earthquake, flood, or other peril is covered at all, particularly where policies contain earthquake or flood exclusions requiring separate endorsements, or anti-concurrent causation language that can bar coverage entirely when a covered peril combines with an uncovered one, such as pre-existing defective construction, to cause a loss. Sinkhole claims carry their own statutory framework under Florida law, requiring specific testing protocols and reporting before a claim is compensable. Developers and contractors, in turn, may find themselves defending Chapter 558 claims while simultaneously litigating with their own carriers over defense and indemnity obligations.
Practical Risk Mitigation Strategies
Property owners, associations, and developers can take several concrete steps to reduce their exposure. First, maintain thorough documentation, including engineering reports, maintenance logs, and photographs, well before any event occurs. This documentation is often the deciding factor in causation disputes. Second, engage structural engineers and consultants immediately following any seismic event, unusual flooding, or storm damage, regardless of whether a hurricane is involved. Prompt inspection preserves evidence and can help prevent inadvertent waiver of construction defect claims. Third, review insurance policies regularly with counsel or a broker to confirm earthquake, flood, and sinkhole coverage matches the property’s actual risk profile, rather than assuming a standard property policy responds to every peril. Fourth, avoid rushing to remediate before conditions are documented and/or before consulting counsel. Well-intentioned repairs can inadvertently compromise evidence needed to prove a defect claim.
The June earthquake was a reminder that Florida’s catastrophic risk profile extends beyond hurricane season. Property owners, associations, and developers who build readiness plans around all forms of catastrophic stress, not just named storms, will be far better positioned when the next unexpected event occurs.
Franchesco “Frank” Soto is a partner in
Ball Janik’s Construction Defect Practice Group in Miami. He may be reached at fsoto@balljanik.com.
Amanda L. Gonzalez is a litigation attorney in
Ball Janik’s Construction Defect Practice Group in Miami. She may be reached at agonzalez@balljanik.com.
