Consequential damages is defined by the Pattern Jury Charge as: A waiver of consequential damages provision, such as that found in Section 8.1.3 of AIA Document B101-2017 Standard Form of Agreement Between Owner and Architect, waives only the owner’s right to claim those damages said to flow indirectly from your wrongful acts or breaches of contract (e.g. Consequential damage is included under comprehensive cover and is damage resulting from other damage. This is one of a series of articles originally published in Mealey’s Litigation Report: Insurance Bad Faith, Vol. (6) The purpose of consequential damages is to place the insured in the position that it would have been in had the insurance contract been performed. The notion that the insurance company should have to pay the fees associated with properly adjusting an insured loss is not a new idea. This means that you’re found at fault or negligent for someone else’s injury or damage. Scott C. Turner, Insurance Coverage of Construction Disputes § 6:22 (2d ed.). Consequential losses can result in substantial amounts of lost revenue. Tiffany Tower filed suit for breach of contract and for consequential damages for breach of the implied covenant of good faith and fair dealing. The few courts that have upheld denials of coverage for consequential damages have … Think of it as a ripple effect. It is merely a straightforward application of the common law doctrine of consequential damages. A: Assuming an ISO HO policy, the policy only covers DIRECT damage to property, not indirect or consequential damage such as a loss in market value due to the appearance of a mix of new and old siding after the repair. A consequential loss is an indirect adverse impact caused by damage to business property or equipment. consequential damages are damages that do not arise directly from the breach, but are recoverable in limited circumstances. Insurance policies do exist to cover consequential losses however. For example, if a car’s fan blade breaks off and damages the radiator to such an extent that the engine overheats, the damage to the radiator and engine is consequential damage. However, the policy doesn’t cover the consequential loss/expense of replacing the entire roof since the remaining shingles have not been damaged by other than normal wear and tear which is excluded elsewhere in the policy. Consequential damages to common areas and unit owners’ property in a condominium complex that result from a subcontractor’s defective work constitute both “property damage” and an “occurrence” pursuant to the plain meaning interpretation of the terms as defined in the Insurance Services Office, Inc.’s (ISO) 1986 standard CGL form. However, it does seem that there is a movement to cover some of these losses. This may vary under non-ISO forms and some states have laws that govern "mismatched" repaired property. 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