Distinguishing its seminal case on coverage for construction defects, Weedo v. Stone-E-Brick, Inc., 81 N.J. 233 (1979), the New Jersey Supreme Court determined that rain damage to the building caused by a subcontractor's faulty workmanship constituted "property damage" and an "occurrence" under the property developer's CGL policy. Cypress Point Condo. Ass'n v.Towers
Business Risk Exclusions
Insured Need Not Own Property When Property Damage Occurs
By Tred R. Eyerly on
The federal magistrate predicted that the Oregon appellate courts would not adopt the owner-claimant rule, restricting recovery under the policy to the time period during which the insured owned the property. Am. States Ins. Co. v. PIH Beaverton LLC, 2016 U.S. Dist. LEXIS 83188 (D. Or. May 3, 2016).
PIH purchased a hotel in…
Federal Court Again Confirms No Coverage For Construction Defects in Hawaii
By Tred R. Eyerly on
The Hawaii federal district court confirmed its prior holdings that there is no duty to defend or indemnify for property damage caused by faulty workmanship. State Farm Fire & Cas Co. v. GP West, Inc., 2016 U.S. Dist. LEXIS 74240 (D. Haw. Jun 7, 2016). (Full disclosure – our office represents GP West in…
Iowa Court Holds Defective Work Performed by Insured’s Subcontractor Constitutes an “Occurrence”
By Tred R. Eyerly on
The Iowa Supreme Court held that property damage caused by a subcontractor's defective work was an "occurrence." Nat'l Sur. Corp. v. Westlake Invs., LLC, 880 N.W. 2d 724 (Iowa 2016).
In 2002, the insureds, the developers and general contractor, began construction on an apartment complex. While the complex was still…
Policy’s Plain Language Bars Business Interruption Coverage
By Tred R. Eyerly on
There was no coverage based upon the plain language of a contingent time element provision regarding business interruption coverage. Directv v. Factory Mut. Ins. Co., 2016 U.S. Dist. LEXIS 12320 (C.D. Cal. Feb. 1, 2016).
The insured, Directv. contracted with four companies to provide "set-top boxes" (STBs) or receivers, to pick up…
Your Work Exclusion Applies to Damage to Tradesman’s Property, Not Damage to Other Property
By Tred R. Eyerly on
The New Mexico Court of Appeals presented a cogent analysis of claims for construction defects and the application of the "your work" exclusion under a CGL policy in Pulte Homes of New Mexico, Inc. v. Indiana Lumbermens Ins. Co., 2015 N.M. App. LEXIS 134 (N. M. Ct. App. Dec. 17, 2015).
Pulte…
Improperly Installed Flanges Are Impaired Property
By Tred R. Eyerly on
Answering certified questions from the Fifth Circuit, the Texas Supreme Court found there was no coverage for flanges that leaked after installation. U. S. Metals, Inc. v. Liberty Mutual Group, Inc., 2015 Texas LEXIS 1081 (Dec. 4, 2015).
U. S. Metals sold Exxon 350 custom-made, stainless steel, weld-neck flanges for use in refineries. Testing…
“Your Work” Exclusion Bars Coverage for Contractor’s Faulty Workmanship
By Tred R. Eyerly on
The West Virginia Supreme Court of Appeals found there was no coverage for the contractor's faulty workmanship in constructing a home. State of W. Virginia ex rel. Nationwide Mut. Ins. Co. v. The Honorable Ronald E. Wilson, 2015 W. Va. LEXIS 963 (W. Va. Oct. 7, 2015).
In July 2009, Fred Hlad…
Neither Designated Work Exclusion nor Pre-Existing Damage Exclusion Defeat Duty to Defend
By Tred R. Eyerly on
A duty to defend existed for alleged construction defects despite the designated work exclusion and the pre-existing damage exclusion. Gemini Ins. Co. v. N. Am Capacity Ins. Co., 2015 U.S. Dist. LEXIS 14836 (D. Nev. Feb. 6, 2015).
Olsen Construction Company held three separate policies issued by Gemini from September 2002 to…
Property Damage to Non-Defective Work Is Covered
By Tred R. Eyerly on
The New Hampshire Supreme Court found some of the property damage evolving from the insured's portion of the work was covered under its liability policy. Cogswell Farm Condo. Ass'n v. Tower Group, Inc., 2015 N.H. LEXIS 3 (N.H. Jan. 13, 2015).
Lemery Building Company, Inc. constructed and developed 24 residential condominium units.