Home Construction Insurance

"Carl: I am a General Contractor and entered into an agreement to build a man
a house. He owns the land and has the funds in hand so he does not have to
get a loan. The agreement is for him to “pay as you go".

Each time a particular phase is completed, he pays for it. There is a schedule of
payments and when each item is finished he pays. It is like getting the draw
from the bank.

My question is, the air conditioning unit was installed and the home owner made payment to me and the payment was passed onto the sub-contractor. After installation, someone stole the unit.
Whose responsibility is this, the contractor or the home owner?
John M."

Didn't the homeowner purchase insurance against loss (It's also called builders risk, or hazard insurance, or fire insurance, or home under construction insurance (homeowners without personal possessions)?
And, was the A/C unit in place and wired?

"Carl, There is no builders risk policy. As the contractor I have a general liability policy and there was no request made for me to purchase a builders risk policy.

The home owner did not purchase any type coverage to protect his interest.

He is asking the contractor to make restitution.

And yes, it was installed and wired.
Thanks, John"

Well John, one of several outcomes could or may occur.

Here are my thoughts:
1. When an item such as an air conditioning unit is installed to (on) a house it becomes “real property”. That is to say, it becomes part of the house and the land the house sits upon…part of the “real estate".
2. Therefore his loss is his loss, no one else’s.
3. However, he may actually have insurance against loss and doesn't want you to know and doesn't want to make a claim to his insurance company, or there is a large deductible that he doesn't want to pay.
4. I find it hard to believe that a person of reasonable intelligence would not insure his house against loss. Theft insurance, while difficult to obtain by a professional builder, should be easy to obtain by a homeowner.
5. Neither you nor the subcontractor should not have pay for the AC unit.
6. But, based on my experience, you will probably end up paying for it if, and only if, you want to stay employed as the homeowner’s builder, avoid lawyers, courtrooms, and a no-win/no-win situation.
7. I would make sure that he has insurance from this point forward

Carl Heldmann, byoh.com