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Who May Satisfy a Self-Insured Retention?

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Who May Satisfy a Self-Insured Retention?

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By Nick Cammarota The Fourth District Court of Appeal has held that a builder may not pay the self-insured retention (SIR) on behalf of a subcontractor, according to the language of the insurance agreement. In Forecast Homes v. Steadfast Insurance Co., the builder was sued for construction defects and tendered the claim to the subcontractors’ insurance company, which had named the builder as an “additional insured.” An SIR is like a deductible, but unlike a deductible an SIR must first be paid before the insurer is required to respond to the claim. The subcontractor did not pay the SIR – the case is unclear as to why – but the builder offered to pay the SIR. Steadfast refused to defend the builder, arguing that the insurer had no obligation because, according to the insurance policy, only the named insured, i.e., the subcontractor, may pay the SIR. While there may be contractual requirements between a builder and a subcontractor for the subcontractor to pay the SIR, such a requirement

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