Sixth Circuit Holds Defective Workmanship Not Covered by Contractor’s CGL Policy

Defective workmanship is not a covered occurrence, according to a 6th circuit decision. The concept of defective work continues to be interpreted differently by states around the country.

Green Building/Construction Law

insurance_policyA recent post on Insurance Developments (this blog’s sister blog) discussed a recent unpublished opinion by the Sixth Circuit Court of Appeals, which held that a contractor’s allegedly poor workmanship did not constitute an “occurrence” under the contractor’s policy, thereby relieving the insurer of the obligation to indemnify the contractor in a construction defect action. While this topic is not specifically related to green building (there are few reported decisions or active cases that are), the principle is nonetheless applicable to contractors working on green building projects.

Very briefly (click the link above if you want to read a slightly more in-depth discussion), Wal-Mart contracted with MW Builders to construct a new Wal-Mart in Kentucky. MW Builders subcontracted the site preparation and some preliminary foundation work to Kay & Kay. After construction was complete, cracks began to develop in the building’s walls, allegedly resulting from settlement below the foundation. MW…

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