The Nebraska Supreme Court found the insurer properly denied coverage to the general contractor for damage to a home caused by settlement. Cizek Homes, Inc. v. Columbia Nat. Ins. Co., 2014 Neb. LEXIS 152 (Neb. Sept. 9, 2014).

   The general contractor built and then sold the residence. Subsequently, the homeowners complained that the soil beneath their residence was settling and causing damage to their home. The homeowners presented a draft complaint to the general contractor, alleging that negligence and faulty workmanship had caused damage to the home. 

   The general contractor notified its carrier, Columbia. Coverage was denied. 

   The general contractor settled with the homeowners. The settlement agreement described the claims to include damages to the residence due to soil conditions and/or improper construction of the home.

   The general contractor then sued Columbia. The trial court granted summary judgment to the general contractor, finding that there was no faulty workmanship and that the damage was caused by an "occurrence."

   On appeal, Columbia contended it was not necessary to determine whether the general contractor was in fact negligent or engaged in faulty workmanship in order to determine coverage. Rather, coverage was determined based upon the allegations in the complaint and the facts revealed in the investigation of the claim. 

   The complaint alleged that the home was damaged because the general contractor failed to construct the home in accordance with the contract, the applicable building codes and manufacturers' recommendations, and the accepted construction and industry standards.The homeowners further alleged the general contractor was negligent in designing and constructing the home and for failing to take into consideration the nature of the land upon which it was built. 

   Therefore, the Supreme Court concluded there was no coverage.The allegations in the complaint supported a conclusion that the damage to the home was caused by faulty workmanship or a similar impropriety in the general contractor's performance. Accordingly, there was no occurrence.