Following recent precedent issued by the Indiana Supreme Court, the federal district court determined the CGL policy provided coverage for damage caused by the subcontractor.  Gen. Casualty Ins. v. Compton Constr. Co., Inc., 2011 WL 939245 (N.D. Ind. March 16, 2011).

   Zubak contracted with Compton to construct a new home.  Compton contracted with subcontractors to test the soil, excavate the site and set the foundation.  After Zubak moved into her new house, she alleges there was a problem with the foundation, causing the home to buckle and shift.

   Zubak sued Compton, alleging breach of contract, negligence, breach of statutory warranty and breach of implied warranty of habitability.  No property damage was alleged other than damage to the house. 

   General Casualty sued for declaratory relief that its policy did not require it to defend or indemnify Compton.  On General Casualty's motion for summary judgment, the federal district court determined it was bound by Sheehan Constr., Inc. v. Continental Casualty Co., 935 N.E. 2d 160 (Ind. 2010) [see post here], a case General Casualty neglected to site.  In Sheehan, the court held that faulty workmanship can constitute an "accident" under a CGL policy.  Therefore, any damage to the home have been caused by an "occurrence," triggering the policy.  The Indiana Supreme Court also held that defective subcontractor work could provide the basis for a claim under a CGL policy. 

   The complaint in this case alleged that subcontractor negligence led to Zubak's propery damage.  Therefore, General Casualty's motion was denied and deemed inappropriate as a matter of law.