Source: Distinguished Programs

A GC under a design-build contract hired an HVAC subcontractor to design and install an HVAC system for a residential apartment project. Once completed and occupied, the apartment units began developing mold and  residents subsequently began complaining of respiratory problems, headaches, and other physical ailments. An error in the HVAC design plans caused significant condensation in the system resulting in mold generation. The GC’s legal costs, remediation costs, as well as costs for bodily injury claims to rectify the problem caused by the design error  were over $1,000,000. Neither the GC nor the subcontractor carried professional liability coverage. The  subcontractor declared bankruptcy, leaving the GC to pay all of the associated damages.