In a much anticipated decision, the Texas Supreme Court ruled that a general contractor who agrees to perform its work in a good and workmanlike manner does not "assume liability" for damages arising out of its defective work so as to trigger the Contractual Liability Exclusion. Ewing Constr. Co., Inc. v. Amerisure Ins. Co.
Comprehensive General Liability
Coverage Doomed After Failing Obtain Insurer’s Consent for Settlement
By Tred R. Eyerly on
The Fourth Circuit affirmed the district court's determination that there was no duty to indemnify after the insured settled without consent of the insurer. Perini/Tompkins Joint Venture v. ACE American Ins. Co., 2013 U.S. App. LEXIS 24865 (4th Cir. Dec. 16, 2013).
The insured, a joint venture, was hired as manager for…
Defense Owed for Pollution Caused by Farmer’s Manure
By Tred R. Eyerly on
The Wisconsin Court of Appeals found that a defense was owed to a farmer for pollution allegedly caused by use of manure. Wilson Mut. Ins. Co. v. Falk, 2013 Wis. App. LEXIS 1931(Wis. Ct. App. Dec. 11, 2013).
The insured used manure from cows as fertilizer for his fields. The state Department…
Defense Owed for Product Liability Claims That Do Not Amount to Faulty Workmanship
By Tred R. Eyerly on
The trial court's holding that there was no occurrence based on claims from faulty workmanship was reversed by the appellate division of the Pennsylvania Superior Court. The underlying claims were based on product liability tort claims, not faulty workmanship. Indalex Inc. v. National Union Fire Insurance Co. of Pittsburgh, PA., 2013 Pa. Super.
Sixth Circuit Finds No Coverage For Faulty Workmanship Under Kentucky Law
By Tred R. Eyerly on
Following Kentucky law, the Sixth Circuit determined there was no coverage for a construction defect claim. Liberty Mut. Fire Ins. Co. v. Kay & Kay Contracting, LLC, 2013 U.S. App. LEXIS 23587 (6th Cir. Nov. 19, 2013).
Walmart hired a contractor to build a new store. The contractor hired Kay and Kay…
Following Buss, Court Grants Insurer’s Request for Reimbursement of Defense Costs
By Tred R. Eyerly on
The federal district court for Northern California granted the insurer's motion for reimbursement of funds advanced to the insured under a reservation of rights. Great Am. Ins. Co. v. Chang, 2013 U.S. Dist. LEXIS 159197 (N.D. Cal. Nov. 6, 2013).
The Changs operated a dry cleaner business on their property from 1977…
No Duty to Defend Claims for Injunctive Relief
By Tred R. Eyerly on
The California Court of Appeal ruled that an insurer does not have a duty to defend a lawsuit seeking injunctive relief and no compensatory damages. San Miguel Cmty. Assn. v. State Farm Gen. Ins. Co., 2013 Cal. App. LEXIS 836 (Cal. Ct. App. Oct. 1, 2013).
San Miguel was a nonprofit residential…
Solvent Policies Must Exhaust Before State’s Guaranty Fund Can Be Tapped
By Tred R. Eyerly on
The New Jersey Supreme Court considered the appropriate allocation for costs of the cleanup of contaminated property when one of the two insurers became insolvent. Farmers Mut. Fire Ins. Co v. N.J. Prop. Liab. Ins. Guar. Ass'n, 2013 N.J. LEXIS 902 (N.J. Sept. 24, 2013).
Newark Insurance Company issued a homeowner's policy…
Business Risk Exclusions Do Not Preclude Coverage
By Tred R. Eyerly on
The court rejected the insurer's arguments that the business risk exclusions barred coverage for a contractor. Gen. Cas. Co. of Wisconsin v. Five Star Bldg. Corp., 2013 U.S. Dist. LEXIS 134122 (D. Mass. Sept. 19, 2013).
Five Star was hired by the University of Massachusetts to upgrade the ventilation (HVAC) system…
Hawaii Court Finds No Bad Faith, But Negligent Misrepresentation Claim Survives Summary Judgment in Construction Defect Action
By Tred R. Eyerly on
Judge Mollway, U.S. District Court Judge for the District of Hawaii, found the insurer was not in bad faith for allegedly leading its insured to believe that construction defects would be covered under the policy. The court, however, allowed the insured's negligent misrepresentation claim to survive summary judgment. Ill Nat'l Ins. Co v. Nordic …