Whether coverage existed for property damage occurring after the subcontract finished its work on the project was the issue presented in United Fire & Cas. Co. v. Boulder Plaza Residential, LLC, 2011 U.S. App. LEXIS 1694 (Jan. 27, 2011).

   Boulder Plaza Residential, LLC ("BPR"), a real estate developer, and McCrery & Roberts Construction Co. ("M&R") entered a contract in which M&R agreed to serve as the general contractor for the interiors of condominiums BPR was building.  The contract provided M&R would indemnify BPR from claims "arising out of or resulting from performance of the Work, . . . but only to the extent caused in whole or in part by negligent acts or omissions of the Contractor or Subcontractor. "

   M&R subcontracted with Summit Flooring, LLC to install hardwood floors in the condominiums.  Summit agreed "to indemnify and save M&R harmless against all claims for damage to persons and property growing out of the execution of the work." 

   Summit obtained a CGL policy from United Fire covering "bodily injury" or "property damage" caused by any "occurrence" which subjected Summit to liability.  M&R was listed as an Additional Insured in an endorsement.  The endorsement provided coverage only with respect to Summit's liability which could be imputed to M&R directly arising out of Summit's ongoing operations. 

   Upon completion of the condominiums, owners notified BPR of damage to the floors.  BPR notified M&R.  M&R sent a claim to United Fire.  After investigation, United Fire determined the floor damage was caused by excessive moisture in the concrete floor and the wood floors at the time of installation, but that Summit's work was sound.  Accordingly, United Fire denied coverage to M&R. 

   When BPR sued M&R and Summit, M&R requested a defense. United Fire denied coverage because the policy only covered M&R with respect to Summit's "ongoing operations." The underlying complaint alleged that damage to the floors was first observed only after Summit had completed installation.  M&R eventually settled and assigned its claims against United Fire to BPR.  United Fire filed suit for a declaratory judgment that it had no duty to defend or indemnify M&R.  

   The district court granted summary judgment to BPR.  United Fire then sought reconsideration based upon a subsequent decision by the Colorado Court of Appeals, General Security Indemn. Co. of Arizona v. Mountain States Mut. Cas. Co. General Security held that a claim for damages arising from poor workmanship, standing alone, did not allege an accident that constituted a covered occurrence.  Based on General Security, the district court granted reconsideration, concluding there was no duty to defend or indemnify.

   On appeal, the Tenth Circuit noted the Colorado legislature had enacted legislation providing that "in interpreting a liability policy issued to a  construction professional, a court shall presume that the work of a construction professional that results in property damage, including damage to the work itself or other work, is an accident."  Nevertheless, the court felt it could resolve the issue of whether a duty to defend or indemnify was owed without reference to General Security or the legislation.

   Any claimed damage was alleged to have arisen after operations were completed.  Under the additional insured endorsement, which limited coverage to liability arising out of the insured's ongoing operations, there was no duty to defend or indemnify M&R.  Therefore, the district court decision was affirmed.