Final Boss has an important warning about LEG 3 wording
Some Builder's Risk insurers are overreacting to the SCB and Archer Western cases by replacing LEG forms with manuscript forms of various names including "cost of making good". Many of these replacements restrict the exception to the defective work/design/material exclusion to an "ensuing loss". In a claim, insurers who use "ensuing loss" language intend to argue that damage to the project caused by work/design/material is not covered - an "independent peril" is needed. Look at the Balfour Beatty v. Liberty case out of Texas for an example. Further, insurers argue that damage which is the "natural and expected consequence" of the defect is not an "ensuing loss". How "ensuing loss" language applies to a given claim depends on facts and what law applies, but we know the intent is to restrict coverage when it is used as a replacement for LEG. Review replacement forms carefully. Ignore representations that the forms are "LEG 3 equivalent" and do not assume that these are forms you are familiar with because you’ve heard their names used before – they’ve changed. If you've had claims with LEG forms, think about how the new proposed language might have impacted those claims.