The "your work" exclusion was held inapplicable to damaged portions of a building for which the insured was not responsible.  Fortney & Weygandt, Inc. v. Am. Manufacturers Mutual Ins. Co., No 05-4031, 2010 U.S. App. LEXIS 2836 (6th Cir. Feb. 12, 2010).

    The insured contracted with Frisch's Restaurants, Inc. to build a Golden Corral restaurant.  When the restaurant was nearly complete, soil shifted around the foundation, breaking the building's underground utility lines.  Frisch determined the foundation was defective.  Consequently, Frisch had to demolish and rebuild the restaurant. 

   In arbitration, Frisch claimed that the insured's defective foundation had caused the damage.  The insured tendered its defense to its insurer.  When coverage was denied, the insured sued.  The district court held coverage was excluded under the defective-workmanship exclusion, paragraph 2 (j)(6).

   Paragraph 2 (j)(6) excluded property damage to "that particular part of any property that must be restored, repaired or replaced because 'your work' was incorrectly performed on it."  The parties agreed that this exclusion barred coverage for claims seeking recovery for the cost of replacing the defective foundation.  But the issue was whether the exclusion prevented coverage for claims for replacing the whole building where the insured's defective work was limited to only the foundation. 

   On appeal, Sixth Circuit followed the Fifth Circuit's decision interpreting paragraph 2 (j)(6) in Mid-Continent Cas. Co. v. JHP Development, Inc., 557 F.3d 207 (5th Cir. 2009).  The first phrase of the exclusion – i.e., "that particular part" – was restrictive and made clear that the exclusion applied only to building parts on which defective work was performed, and not to the building generally.  Further, "part" meant the "distinct component parts" of a building.  The (j)(6) exclusion therefore applied only to the cost of repairing or replacing distinct component parts on which the insured performed defective work.  Accordingly the insurer had a duty to defend the insured against Frisch's claim.