Mealey's Construction Defects Insurance

  • 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.).

  • November 21, 2019

    Fungus Exclusion Bars Coverage For $861,592 Award, Insurer Argues

    HOUSTON — Citing a fungus or spore exclusion and business risk exclusions, an insurer alleges in a Nov. 18 complaint filed in a Texas federal court that there is no coverage for a $861,592.73 judgment for water penetration and mold growth at a 326-unit apartment complex (Acceptance Indemnity Insurance Co. v. SLI Framing Company, Inc., et al., No. 19-4531, S.D. Texas).

  • November 19, 2019

    Insured: 10th Circuit Should Reverse Coverage Denial In Construction Defect Case

    DENVER — A precast concrete company is asking the 10th Circuit U.S. Court of Appeals to reverse a district court’s order and find that its insurer wrongly denied the company’s claim related to an underlying complaint against the company in which the plaintiffs alleged construction defects on a building project (Rocky Mountain Prestress LLC v. Liberty Mutual Fire Insurance Company, No. 19-1169, 10th Cir.).

  • November 18, 2019

    Chimney Company Seeks Coverage From Insurers For Alleged Faulty Work

    PHILADELPHIA — A chimney and fireplace service provider filed a declaratory judgment action on Nov. 15 against its insurers in a Pennsylvania federal court regarding coverage for three underlying allegations of negligent work performed in chimney services (Estate Chimney & Fireplace, LLC v. IFG Companies, et al., No. 19-05374, E.D. Pa.).

  • November 15, 2019

    Insureds, Homeowners Answer Insurer’s Appeal Of Construction Defects Coverage Ruling

    PHILADELPHIA — Insured contractors and homeowners who are suing them in two underlying construction defects lawsuit filed two separate briefs in the Third Circuit U.S. Court of Appeals on Oct. 26, refuting a commercial general liability insurer’s appeal of a federal court's ruling that it has a duty to defend against the underlying claims (Nautilus Insurance Company v. 200 Christian Street Partners LLC, et al., Nos. 19-1507 and 19-1506, 3rd Cir.).

  • November 14, 2019

    Connecticut High Court Says No Coverage Owed For Crumbling Foundations

    HARTFORD, Conn. — In three opinions issued Nov. 12, the Connecticut Supreme Court determined that no coverage is afforded under homeowners insurance policies for the deterioration of cracking of the homeowners’ foundation walls as a result of the use of defective concrete when the homes were built because the collapse provisions only provide coverage for the abrupt caving in or falling down of  a structure (Steven Karas, et al. v. Liberty Insurance Corp., No. 20149, Steven L. Vera, et al. v. Liberty Mutual Fire Insurance Co., No. 20178, Edith R. Jemiola, trustee of the Edith R. Jemiola Living Trust, v. Hartford Casualty Insurance Co., No. 19978, Conn. Sup.).

  • November 08, 2019

    Judge Allows Builder To Add Insurer To Dispute Over Foundation Issues

    SHERMAN, Texas — A federal judge on Nov. 5 granted a residential home builder’s request to add one of two insurers to its coverage dispute over the cost of $2 million in repairs to 49 homes that allegedly suffered damage from foundation issues (American Legend Homes v. Navigators Specialty Insurance Co., No. 19-00035, E.D. Texas, 2019 U.S. Dist. LEXIS 191341).

  • November 06, 2019

    Water Intrusion Caused By Negligent Installation Is Not Covered, Insurer Says

    MIAMI — There is no coverage for water intrusion caused by an insured’s alleged negligent installation of impact-resistant windows and doors because the insured failed to give proper notice, a commercial general liability insurer says in a Nov. 1 complaint filed in a Florida federal court (Evanston Insurance Co. v. Impact Glass Services, LLC, et al., No. 19-24545, S.D. Fla.).

  • November 06, 2019

    Insurer Says No Coverage For Enforcement Action Over Construction Defects

    TALLAHASSEE, Fla. — A commercial general liability insurer on Nov. 1 sued its insured and homebuilders, seeking declaratory relief that there is no insurance coverage for an underlying enforcement action filed by the Florida attorney general over construction defects in homes sold throughout the state (Kinsale Insurance Co. v. PulteGroup, Inc., et al., No. 19-00544, N.D. Fla.).

  • November 05, 2019

    Court Erred In Sustaining Demurrers In Insurance Dispute, Insurer Argues

    SAN JOSE, Calif. — A California court erred in sustaining demurrers without leave to amend in a construction defects insurance lawsuit because the discovery that an insurer’s obligations to a subcontractor arose from fraudulent activity should not result in the general contractor’s insurers avoiding their obligations to their insured “in their entirety,” punishing the subcontractor’s insurer for fulfilling its obligations to it insurer, the subcontractor’s insurer argues in a Sept. 4 appellant brief filed in a California appellate court (The Travelers Indemnity Company of Connecticut v. Navigators Specialty Insurance Co., et al., No. H046784, Calif. App., 6th Dist.).

  • November 05, 2019

    Policy’s Subrogation Waiver Is Ambiguous, 6th Circuit Majority Says In Reversal

    CINCINNATI — A majority of the Sixth Circuit U.S. Court of Appeals on Oct. 30 reversed a lower federal court’s summary judgment ruling in favor of an insurer, concluding that the policy’s subrogation waiver is ambiguous as to whether the insurer can sue an additional insured for damage caused by negligence (Certain Underwriters at Lloyd's, London v. Sunbelt Rentals, Inc., No. 18-5617, 6th Cir., 2019 U.S. App. LEXIS 32461).

  • November 04, 2019

    Insurer:  No Coverage For Homeowners’ Breach Of Contract, Defect Claims

    ATLANTA — A commercial general liability insurer on Oct. 30 sought a declaratory judgment from a Georgia federal court that insureds’ alleged breach of contract with homeowners and defective construction asserted in an arbitration demand do not constitute an “occurrence” under the policies (Mid-Continent Casualty Co. v. EREV, LLC, et al., No. 19-04888, N.D. Ga.).

  • November 01, 2019

    Panel Upholds Insurer’s Duty To Defend Defect Case, Award Of Defense Costs

    ANNAPOLIS, Md. — The Maryland Court of Special Appeals on Oct. 30 affirmed that subcontractors’ insurer had a duty to defend a general contractor in a construction defect lawsuit regarding the subcontractors’ work and upheld a judgment in favor of the contractor’s insurer for $994,719.54 reduced by settlements (Selective Way Insurance Co. v. Nationwide Property and Casualty Insurance Co., et al., No. 755, Md. Spc. App., 2019 Md. App. LEXIS 918).

  • November 01, 2019

    Judge Dismisses Insurer’s Duty-To-Indemnify Case On Defects Claims As Unripe

    FORT MYERS, Fla. — An insurer’s declaratory judgment action over its duty to indemnify a general contractor and subcontractor in a construction defects case is unripe, a Florida federal judge ruled Oct. 30, granting the general contractor’s motion to dismiss (Hartford Fire Insurance Co. v. Beazer Homes LLC, et al., No. 19-454, M.D. Fla., 2019 U.S. Dist. LEXIS 187810).

  • October 30, 2019

    Contractor Asks 9th Circuit To Reverse No Coverage Ruling For Defects Claims

    SAN FRANCISCO — An additional insured general contractor recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that commercial general liability insurance policies' business risk exclusions preclude coverage for construction defects alleged by homeowners (Pulte Home Corporation v. TIG Insurance Company, No. 18-55792, 9th Cir.).

  • October 29, 2019

    Faulty Work Is Not An ‘Occurrence,’ Insurer Tells Alabama Federal Court

    BIRMINGHAM, Ala. — A commercial general liability insurer says in an Oct. 28 complaint that it has no duty to defend or indemnify an insured in two construction defect cases because faulty workmanship does not constitute an “occurrence” and several exclusions apply (American Builders Insurance Co. v. Riverwood Construction LLC, et al., No. 19-01757, N.D. Ala.).

  • October 22, 2019

    Insurer Has No Duty As Damage Occurred Outside Policy Period, Judge Says

    RIVERSIDE, Calif. — Finding that water damage occurred outside a plumbing company’s insurance policy period, a California federal judge on Oct. 17 ruled that the insurer has no duty to defend or indemnify the plumbing company and is entitled to judgment on the pleadings on bad faith, breach of contract and indemnification/contribution claims (Graham Plumbing & Drain Cleaning, Inc. v. Colony Insurance Co., No. 19-1130, C.D. Calif., 2019 U.S. Dist. LEXIS 180984).

  • October 17, 2019

    Defective Workmanship Does Not Constitute An Occurrence, Judge Says

    PHILADELPHIA — A Pennsylvania federal judge on Oct. 15 granted a commercial general liability insurer’s motion for summary judgment after determining that the insurer has no duty to defend its insured subcontractor or an alleged additional insured contractor against a claim arising out of water and mold damages caused by the defective installation of air conditioning units by the subcontractor because defective workmanship does not constitute an occurrence under the policy (Utica Mutual Insurance Co. v. Voegele Mechanical Inc, et al., No. 18-3959, E.D. Pa., 2019 U.S. Dist. LEXIS 178038).

  • October 14, 2019

    3rd Circuit:  Subcontractor Knowingly Waived Claims Against Contractor, Sureties

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Oct. 11 affirmed dismissal of a subcontractor’s claims against a contractor and its sureties in a dispute over a delayed construction project because the subcontractor knowingly and voluntarily waived its claims under releases and change orders and the contractor did not relinquish its right to enforce the release language in those agreements (Connelly Construction Corp. v. Travelers Casualty and Surety Company of America, et al., No. 18-3631, 3rd Cir., 2019 U.S. App. LEXIS 30517).