Insurers are undoubtedly pleased with the Hawaii Intermediate of Appeals decision last year holding that construction defect claims do not constitute an "occurrence" under a CGL policy. See Group Builders, Inc. v. Admiral Ins. Co., 123 Hawaii 142, 148, 231 P.3d 67, 73 (2010).
But what about Island Insurance, a party to the Group Builders' case, whose wall covering on the exterior of its building fell and struck a pedestrian yesterday? (See story from KITV.com here). The story reports that Island called in its contractors to assess the damage. It's ironic, but if Island is sued and turns to its contractor for indemnification based on to faulty work which caused the bodily injury to the pedestrian, the contractor's insurer would likely deny coverage under Group Builders.
