In recent months, there have been numerous news reports of homeowners in the United States complaining of drywall creating a rotten egg odor in their homes, corroding electrical systems and equipment and, in some cases, causing serious allergic reactions. Experts believe the problems are linked to sulfite emissions from China-imported drywall, which may be present in thousands of homes throughout the country.

To remedy this problem, these homeowners have turned to the builders who used the drywall. Those builders, in turn, face the potentially astronomical cost of repairing or replacing the drywall and any related damage or injury. While most builders are looking to the manufacturer of the drywall for compensation, more recent reports indicate that one of the principal manufacturers of the product may not have insurance available to cover these costs. This increases the possibility that many builders will be forced to shoulder this financial burden alone. In this unstable economic climate, these unexpected costs may have a devastating impact on builders across the country.

Under these circumstances, it is imperative for builders to compile their available insurance for all relevant years the drywall may have been used and provide prompt notice to their insurance carriers of any related claims. Builders should remain wary, however, because this avenue of recourse is not without potential pitfalls. Some insurance executives believe that insurers may attempt to deny coverage to builders for these claims. Builders should carefully review their policies and get an independent assessment of the available coverage before conceding to any such denial.

SDV, one of the nation’s leading law firms in advocating policyholder rights, can provide that coverage analysis and assist in the recovery of insurance proceeds. Please contact Jeffrey Vita for more information.