Victory for Construction Advocacy Fund-Financed AGC Lawsuit

The Small Business Administration (SBA) intends to withdraw the “Loan Necessity Questionnaire” that has heavily burdened and delayed all applications for forgiveness of Paycheck Protection Program (PPP) loans of $2 million or more. AGC sued SBA last December for developing the form entirely in secret, and without public input, and for using the form to change the de facto requirements for the forgiveness of such loans. During lawsuit settlement negotiations, AGC learned of SBA’s decision to withdraw the questionnaire. Recently, AGC has also received an exceptionally large number of reports about SBA approving these loans for forgiveness. This is excellent news for the thousands of AGC members who accepted such loans in good faith in order to keep their people working.

Together, AGC of America and its Michigan Chapter have extended the association’s long string of successful efforts to establish that the commercial general liability insurance (CGL) policy sold to construction contractors across the United States does provide coverage for property damage resulting from unexpected and unintended defects in a subcontractor’s workmanship (unless one of the policy’s specific exclusions applies). On June 29, 2020, the Michigan Supreme Court became the latest of many state supreme courts to agree that such damage is an “occurrence.”

Together, AGC of America and its Maryland Chapter have plugged a potential loophole in standard contract provisions intended to preclude costly litigation over the damage that a project suffers during construction. The association’s victory in Maryland’s highest court means the standard provisions will continue to have their intended effect, precluding litigation over property damage that the builder’s risk insurance will cover.