Mealey's Construction Defects Insurance

  • February 13, 2020

    Insurer Seeks Equitable Subrogation, Contribution For Construction Defect Case

    CHICAGO — An insurer on Feb. 11 sued two subcontractor insurers in an Illinois federal court for equitable subrogation and equitable contribution regarding their duty to defend and indemnify a general contractor in a construction defect case involving a Michigan mall (Old Republic General Insurance Corp. v. Amerisure Insurance Co., et al., No. 20-992, N.D. Ill.).

  • February 11, 2020

    Appellant: Insured’s Negligence Caused Damage ‘Well Within’ Effective Policy Dates

    SANTA ANA, Calif. — An appellant recently asked a California appeals court to reverse a lower court’s grant of summary judgment in favor of a general liability insurer in his direct action lawsuit asserting that the insurer wrongfully denied coverage for property damage caused by a retaining wall that was constructed by the insured, arguing that, at minimum, there are triable issues of material fact regarding whether his losses are covered under the policies (Thomas Guastello v. AIG Specialty Insurance Co., No. G057714, Calif. App., 4th Dist., Div. 3).

  • February 03, 2020

    Insurer Has No Duty To Defend Faulty Work Claims, Florida Federal Judge Finds

    FORT MYERS, Fla. — A commercial general liability insurer has no duty to defend an underlying construction defects case because there are no allegations of damage that extend beyond faulty workmanship, a Florida federal judge ruled Jan. 29 (Southern-Owners Insurance Co. v. MAC Contractors of Florida LLC, et al., No. 18-21, M.D. Fla., 2020 U.S. Dist. LEXIS 14611).

  • January 31, 2020

    Extrinsic Facts In Collapse Suit Placed Insurer On Notice Of Possible Defense Duty

    NATCHEZ, Miss. — A Mississippi federal judge on Jan. 30 determined than an insurer is not entitled to summary judgment on the issue of its duty to defend an insured for an underlying lawsuit arising out of the collapse of an insured building because there was sufficient extrinsic evidence available to the insurer that provided the insurer with notice that it may have a duty to defend the underlying lawsuit (Hudson Specialty Insurance Co. v. Talex Enterprises LLC, et al., S.D. Miss., 17-137, 2020 U.S. Dist. LEXIS 15412).

  • January 31, 2020

    8th Circuit:  Insurer Owes Defense For Damages From Complex’s Roof Leak

    ST. LOUIS — An insurer has a duty to defend alleged damages from a luxury apartment complex’s leaky roof because the claims fall within the policy's scope and there are no applicable exclusions, an Eighth Circuit U.S. Court of Appeals panel affirmed Jan. 30 (Westfield Insurance Co. v. Miller Architects & Builders, Inc., No. 18-2970, 8th Cir., 2020 U.S. App. LEXIS 2972).

  • January 30, 2020

    Judge Refuses To Reconsider Dismissal Of Defective Foundation Coverage Suit

    NEW HAVEN, Conn. — A Connecticut federal judge on Jan. 30 denied a motion to alter a judgment dismissing a breach of contract and bad faith suit filed against a homeowners insurer because recent developments in Connecticut law regarding coverage under collapse provisions for the deterioration of the foundation walls as a result of the use of defective concrete do not support a finding that coverage is owed to the insureds (Marianne Gilmore, et al. v. Teachers Insurance Co., No. 18-1856, D. Conn., 2020 U.S. Dist. LEXIS 14548).

  • January 28, 2020

    Loss Caused Solely By Faulty Workmanship, Construction, Insurer Says To 9th Circuit

    SAN FRANCISCO — A builders risk insurer recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that a faulty workmanship exclusion does not preclude coverage for an insured’s repair costs, arguing that the claimed loss was caused solely by the insured’s and its subcontractor’s faulty workmanship and construction (Engineered Structures, Inc. v. Travelers Property Casualty Company, No. 18-35588, 9th Cir.).

  • January 28, 2020

    Insurer: No Coverage For Charity Foundation’s Poorly Constructed Homes

    NEW ORLEANS — An insurer sued Make it Right Foundation (MIRF) and the charity foundation’s officers on Jan. 24 in a Louisiana federal court, alleging that it has no duty to defend or indemnify underlying claims of poor workmanship in homes built after Hurricane Katrina (TIG Insurance Co. v. Make It Right Foundation, et al., No. 20-00262, E.D. La.).

  • January 28, 2020

    Magistrate Judge:  OCIP Exclusion Relieves Insurer Of Duty To Defend Defects Case

    WEST PALM BEACH, Fla. — An insurance policy’s exclusion for “projects and operations covered by a consolidated (wrap-up) insurance program” (OCIP exclusion) precludes coverage to an additional insured for an underlying construction defects lawsuit, a Florida federal magistrate judge held Jan. 24, finding that the insurer has no duty to defend (Liberty Mutual Fire Insurance Co. v. Southern-Owners Insurance Co., No. 18-81018, S.D. Fla., 2020 U.S. Dist. LEXIS 12757).

  • January 27, 2020

    Judge Allows Insurer To Amend Damages To Include $876,000 In Repair Costs

    LONDON, Ky. — A Kentucky federal judge on Jan. 23 refused to dismiss an insurer’s case against its insured regarding coverage for roof repairs and allowed the insurer to amend its complaint to assert damages including $876,700 in repair costs (Frankenmuth Mutual Insurance Co. v. Balis Campbell, Inc., et al., No. 18-291, E.D. Ky., 2020 U.S. Dist. LEXIS 11321).

  • January 27, 2020

    Insurer Sues 5 Insurers For Indemnity, Contribution In Defense Of Defects Claims

    SAN FRANCISCO — An insurer on Jan. 22 sued five other insurers in a California federal court seeking a declaration of their coverage obligations in the defense of a consolidated underlying construction defects case arising out of a Hampton Inn hotel project (ACE American Insurance Co. v. Old Republic General Insurance Corp., et al., No. 20-cv-00482, N.D. Calif.).

  • January 24, 2020

    Insurer:  No Coverage For Construction Defects Case; Insurers Owe Contribution

    MIAMI — A commercial general liability insurer in a Jan. 22 complaint seeks a declaration from a Florida federal court that there is no duty to defend or indemnify a construction defect action filed against its insured, a declaration that two other insurers owe coverage and contribution from those two insurers for any indemnity payments made on the insured’s behalf (Gemini Insurance Co. v. Delant Construction Co., et al., No. 20-20280, S.D. Fla.).

  • 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.).