Mealey's Construction Defects Insurance

  • January 15, 2020

    Damages From Insured’s Alleged Delays On Project Are Not Covered, Insurer Says

    MINNEAPOLIS — A commercial general liability insurer tells a Minnesota federal court in a Jan. 13 complaint that there is no coverage for damages incurred from an insured’s alleged delay and the abandonment of a unitized metal panel (UMP) system in favor of a different system (Liberty Insurance Corp. v. Kraus-Anderson Construction Co., et al., No. 20-00171, D. Minn.).

  • January 15, 2020

    Insurer: No Coverage For Defective HVAC System In Student Housing Complex

    BIRMINGHAM, Ala. — An insurer alleges in a Jan. 10 complaint filed in an Alabama federal court that coverage does not exist for an additional insured for claims arising out of allegedly defective heating, ventilation and air conditioning (HVAC) installation work in a student housing complex because there is no “occurrence” and the work is otherwise excluded (Pennsylvania National Mutual Casualty Insurance Co. v. 3D Air Services, LLC, et al., No. 20-43, N.D. Ala.).

  • January 14, 2020

    Panel Decides Application Of Policy’s Suit Limitation Clause On Insured’s Claims

    SEATTLE — While an insurance policy’s one-year suit limitation clause precludes a condominium association from suing its insurer for breach of contract, a Washington appeals panel held Jan. 13 that the clause does not bar the association’s extracontractual claims under the Washington Insurance Fair Conduct Act (IFCA) and the Washington Consumer Protection Act (CPA) (West Beach Condominium v. Commonwealth Insurance Company of America, No. 79676-3-I, Wash. App., Div. 1, 2020 Wash. App. LEXIS 58).

  • January 14, 2020

    Subcontractor: Insurers Breached Contract In Denying Coverage For Defects Claims

    WEST PALM BEACH, Fla. — A subcontractor alleges in separate complaints filed Dec. 23 in a Florida federal court that two insurers breached their contracts by failing to defend and indemnify it as an additional insured against underlying allegations of defective work in an apartment building project (Orange & Blue Construction, Inc. v. HDI Global Specialty SE, No. 19-81707; Orange & Blue Construction, Inc. v. Underwriters at Lloyd’s, London, No. 19-81708, S.D. Fla.).

  • January 13, 2020

    Known Loss Doctrine Bars Business Interruption Coverage, Illinois Panel Affirms

    CHICAGO — An Illinois appeals panel on Jan. 10 affirmed a lower court’s summary judgment ruling in favor of a business owners insurer based on the known loss doctrine because the insured knew that a construction project prompted by building code violations would cause a loss of business income before the inception of its insurance policy and the insured failed to disclose the construction project to the insurer (Dining Heritage, Inc. v. Leading Insurance Group Insurance Company, Ltd., et al., Ill. App., 1st Dist., 5th Div., 2020 Ill. App. Unpub. LEXIS 22).

  • January 13, 2020

    Panel Upholds Allocation For Indemnity Of $2.4M Award Between Insurers

    DALLAS — In the third appeal in an insurance coverage dispute, a Texas appeals panel on Jan. 9 affirmed a ruling allocating a $2.4 million construction defects arbitration award between two commercial general liability insurers and denying the insureds’ request for attorney fees incurred in the first appeal (Great American Lloyds Insurance Co., et al. v. Vines-Herrin Custom LLC, et al., No. 05-18-00337-CV, Texas App., 5th Dist., 2020 Tex. App. LEXIS 230).

  • January 10, 2020

    No Coverage For Water Damage To Exterior Insulation Finishing System, Panel Affirms

    DENVER — The 10th Circuit U.S. Court of Appeals on Jan. 9 held that the “flawed design” of a home’s exterior insulation finishing system (EIFS) constitutes “faulty design” and, therefore, there is no coverage for water damage discovered within the EIFS (Mark Mock, et al. v. Allstate Insurance Company, No. 18-1407, 10th Cir.).

  • January 09, 2020

    Waterpark Owner Seeks Review Of Ruling Upholding No Insurance For Collapse

    MINNEAPOLIS — A waterpark owner petitioned the Minnesota Supreme Court on Jan. 7 to review a ruling affirming that a roof collapse allegedly caused by defective construction occurred outside the policy period of a commercial general liability insurance policy because there was evidence that the collapse was caused by progressive structural damage over a long period of time (Thumper Pond Resort, LLC v. Badger Midwest Holdings, LLC, et al., No. n/a, Minn. Sup.).

  • January 08, 2020

    Exclusion Bars Coverage For Construction Of Beetle-Infested Log Home, Panel Affirms

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on Dec. 27 affirmed a lower federal court’s ruling that a claim alleging that an insured constructed a beetle-infested log home is barred from coverage by a commercial general liability insurance policy’s exclusion for certain damages arising out of the insured's work (Northland Casualty Co. v. Joseph S. Mulroy, et al., No. 19-35085, 9th Cir., 2019 U.S. App. LEXIS 38702).

  • January 07, 2020

    Panel: ‘Your Work’ Exclusion Limits Insurance Coverage; Settlement Is Unreasonable

    MINNEAPOLIS — A Miller-Shugart settlement agreement between a marina and a contractor over defects claims is unreasonable, a Minnesota appeals panel held Dec. 16, because the “your work” exclusion in an insurance policy limits coverage and the agreement failed to allocate between covered and noncovered damages (King’s Cove Marina, LLC v. Lambert Commercial Construction LLC, et al., No. A19-0078, Minn. App., 2019 Minn. App. LEXIS 389).

  • January 06, 2020

    No Coverage Owed For Mold Caused By Defective Installation Of Insulation

    SALT LAKE CITY — No coverage is owed to an insured for an underlying suit alleging that the insured’s installation of attic insulation caused mold to develop in attics of condominium buildings because the installation of the insulation does not constitute an occurrence, a Utah federal judge said Dec. 23 in granting the insurer’s motion for summary judgment (Cincinnati Specialty Underwriters Insurance Co. v. Green  Property Solutions LLC, et al., No. 19-00010, D. Utah, 2019 U.S. Dist. LEXIS 220161).

  • January 02, 2020

    Judge: Insurers Owe No Coverage Because There Is No ‘Property Damage’

    FRESNO, Calif. — Insurers have no duty to defend or indemnify an underlying action over moisture damage to flooring in a student recreation center, a California federal judge ruled Dec. 27, because there is no alleged “property damage” as a contractor is seeking only reimbursement of back-charges to an insured’s work (Employers Mutual Casualty Co., et al. v. North American Specialty Flooring, Inc., et al., No. 19-00544, E.D. Calif., 2019 U.S. Dist. LEXIS 221704).

  • January 02, 2020

    Insurer: No Duty To Defend Construction Defects Allegations

    RICHMOND, Texas — An insurer petitioned a Texas trial court on Nov. 26 for a declaratory judgment that it has no duty to defend underlying allegations arising out of construction defects in the remodeling of a home following a hurricane (United Specialty Insurance Co. v. Brickhouse Construction, LLC, No. 19-DCV-269030, Texas Dist., Fort Bend Co.).

  • December 20, 2019

    Panel:  Insurer Has Duty To Defend $1.8M In Damages From Insured’s Faulty Work

    CHICAGO — A commercial general liability insurer had a duty to defend a general contractor against claims of $1.8 million in damages arising out allegedly faulty workmanship that led to a collapse, an Illinois appeals panel ruled Dec. 18, finding that “vague references” to damage to “personal property” are enough to allege “property damage” caused by an “occurrence” (Certain Underwriters at Lloyd’s London, subscribing to certificate No. RTS000275-4 v. Metropolitan Builders, Inc., et al., No. 1-19-0517, Ill. App., 1st Dist., Div. 3, 2019 IL App [1st] 190517).

  • December 18, 2019

    Pennsylvania High Court: Settlement Is Ambiguous As To Insolvent Insurer’s Release

    HARRISBURG, Pa. — A settlement agreement is ambiguous as to whether a contractor released its own insurers, including an insolvent insurer, from providing coverage for underlying construction defect claims on a project for an university, a majority of the Pennsylvania Supreme Court ruled Dec. 17, vacating a lower court’s decision and remanding (Suffolk Construction Co. v. Reliance Insurance Co. [in liquidation], No. 40 MAP 2019, Pa. Sup., 2019 Pa. LEXIS 6972).

  • December 16, 2019

    9th Circuit Revives Builder’s Suit Over Insurer’s Refusal To Defend Defect Suits

    PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel on Dec. 4 reversed a federal judge in California’s ruling awarding summary judgment to an insurer that refused to defend Pulte Home Corp. in two construction defect lawsuits brought by homeowners, finding that the lawsuits did not provide enough information to show that the occurrence did not happen during the policy period and that the insurer was unable to show that the business risk exclusion was applicable (Pulte Home Corp. v. TIG Insurance Co., No. 18-55792, 9th Cir., 2019 U.S. App. LEXIS 35988).

  • December 13, 2019

    Surety: No Liability For $3.17M In Remediation Costs For Subcontractor’s Work

    BOSTON — A surety on Dec. 3 tells a Massachusetts federal court that it has no liability under a performance bond for $3.17 million in remediation costs for noncompliant subcontractor work because a contractor failed to comply with the bond’s “express and unambiguous conditions precedent” (Arch Insurance Co. v. The Graphic Builders LLC, No. 19-12445, D. Mass.).

  • December 11, 2019

    10th Circuit Affirms Dismissal Of Insurer’s Breach Of Contract Case Based On ‘Suit’ Definition

    DENVER — Finding no error in a lower court’s interpretation of an insurance policy’s definition of “suit,” the 10th Circuit U.S. Court of Appeals on Dec. 6 affirmed that an insurer failed to assert a breach of contract claim against an insured for its alleged failure to pay per-occurrence deductibles that would have offset an amount the insurer paid to settle underlying water damage claims filed by townhome owners and an association (Mid-Continent Casualty Co. v. Greater Midwest Builders Ltd., et al., No. 18-3113, 10th Cir., 2019 U.S. App. LEXIS 36302).

  • November 26, 2019

    Contractor: Builders Risk Insurer Improperly Handled Water, Mold-Related Claim

    SAN FRANCISCO — An additional insured contractor alleges in a Nov. 7 complaint filed in a California federal court that a builders risk insurer breached its policy, acted in bad faith and violated California Business and Professions Code Section 17200 et seq., regarding its claim handling of water and mold-related damage in a construction project (Build Group, Inc. v. Liberty Surplus Insurance Corp., No. 19-07359, N.D. Calif.).

  • November 22, 2019

    Insurer Breached Contract, Acted In Bad Faith In Claims Response, Contractor Says

    TAMPA, Fla. — A contractor sued a commercial general liability insurer on Nov. 21 in a Florida federal court, alleging that the insurer breached its contract and acted in bad faith by failing to respond to claims for additional insured coverage for an underlying construction defects action (Suffolk Construction Company, Inc. v. Auto-Owners Insurance Co., No. 19-02878, M.D. Fla.).