Although the excess carrier was given inadequate notice of the underlying arbitration, the trial court determined it shared responsibility with the primary carrier for the arbitration award. Finding disputed issues of fact, the Washington Court of Appeals reversed in Am. States Ins. Co. v. Century Surety Co., 2011 Wash. App. LEXIS 2488 (Wash.
Construction Defects
Ensuing Loss Provision Does Not Salvage Coverage
By Tred R. Eyerly on
Water intrusion caused by a contruction defect was not covered under the all risk policy's ensuing loss provision. See Friedberg v. Chubb & Son, Inc., 2011 U.S. Dist. LEXIS 123582 (D. Minn. Oct. 25, 2011).
Extensive water damage was discovered in the insureds' home when a small hole in the exterior…
Faulty Workmanship Causing Damage to Other Property Covered as Construction Defect
By Tred R. Eyerly on
In yet another recent construction defect case, the Illinois Court of Appeal found for coverage. See Milwaukee Mut. Ins. Co. v. J.P. Larsen, Inc., 2011 Ill. App. Ct. LEXIS 872 (Ill. Ct. App. Aug. 15, 2011).
Weather-Tite, Inc. hired Larson as a subcontractor to apply sealant to windows installed by Weather-Tite in a condominium…
South Carolina Court Reverses Itself on Construction Defect Issue
By Tred R. Eyerly on
In a January decision, the South Carolina Supreme Court found no coverage under a CGL policy for construction defects. On rehearing and after considering numerous amici briefs, the court withdrew its initial opinion and determined there was coverage for progressive property damage caused by faulty workmanship. Crossmann Communities of North Carolina, Inc. v. Harleysville …
Faulty Workmanship, Standing Alone, is Not an Occurrence Under Kentucky Law
By Tred R. Eyerly on
The federal district court was bound by a prior decision from the Kentucky Supreme Court in deciding construction defects did not qualify as an "occurrence" under a CGL policy. See State Auto Ins. Co. v. Thomas Landscaping & Construction, Inc., 2011 U.S. Dist. LEXIS 88176 (E.D. Ohio Aug. 9, 2011).
After Thomas…
No Coverage For Construction Defects When Complaint Alleges Contractual Damages
By Tred R. Eyerly on
The underlying plaintiff's allegations contended the contractor was in breach of contract for construction defects caused in building her home. Accordingly, the court found no coverage. See Nat'l Builders and Contractors Ins. Co. v. Slocum, 2011 U.S. Dist. LEXIS 81694 (S.D. Miss. July 26, 2011).
Slocum Construction LLC sold a home it…
Coverage for Construction Defects Barred by Business Risk Exclusions
By Tred R. Eyerly on
Although the court determined there was an occurrence, coverage was excluded by the business risk exclusions. See Cont'l W. Ins. Co. v. Shay Constr. Co., 2011 U.S. Dist. LEXIS 82839 (D. Colo. July 28, 2011).
White was the general contractor on the project. White had three subcontracts with Shay to provide framing, siding, and…
Condominium Exclusion Bars Coverage for Construction Defect
By Tred R. Eyerly on
Coverage was denied under the policy's condominium exclusion in California Traditions, Inc. v. Claremont Liability Ins. Co., 2011 Cal. App. LEXIS 912 (Cal. Ct. App., ordered published July 11, 2011).
California Traditions was the developer and general contractor for a housing development. California Traditions subcontracted with Ja-Con to perform the rough framing work for 30 residential…
Insurer May Be In Bad Faith Despite Trial Court’s Holding of No Coverage for Construction Defects
By Tred R. Eyerly on
After the trial court determined the insurers had no coverage obligations for alleged construction defects, a ruling that was subsequently reversed, it was still possible to demonstrate the insurers acted in bad faith. See Lennar Corp. v. Transamerica Ins. Co., 2011 Ariz. App. LEXIS 123 (Ariz. Ct. App. July 5, 2011).
Lennar oversaw…
Policy Covers Construction Defects, But Disputed Facts Exist on Applicability of Manifestation Trigger
By Tred R. Eyerly on
The insured was a developer of a residential project. Mid-Continent Cas. Co. v. Siena Home Corp., 2011 U.S.Dist. LEXIS 79132 (M.D. Fla. July 8, 2011). The homeowners filed suit, alleging their homes had defectively constructed exterior wall assemblies which allowed moisture and water to penetrate.
Mid-Continent filed suit for a declaratory judgment…