Texas Supreme Court Rejects Contractual Liability Exclusion for Construction Defect Case

Significant Texas opinion dealing with contractual liability exclusion in CGL policy and construction defects.

Laurie & Brennan, LLP

In a significant, highly-anticipated new opinion regarding insurance coverage for construction defects, the Texas Supreme Court in Ewing Construction Co. Inc. v. Amerisure Insurance Co. held that the contractual liability exclusion in commercial general liability (“CGL”) policies does not operate to bar coverage for ordinary breach of contract claims alleging that the contractor failed to perform its work in a good and workmanlike manner.

The facts in Ewing Construction Co. Inc. v. Amerisure Insurance Co. are relatively simple.  Ewing Construction Company, Inc. (“Ewing”) contracted with Tuluso-Midway Independent School District (“TMISD”), to serve as general contractor to renovate and build additions to a school in Corpus Christi, Texas, including building new tennis courts. Shortly after completion, TMISD sued Ewing claiming that the courts started flaking, crumbling, cracking, and were unusable for their intended purpose of hosting competitive tennis events. TMISD alleged breach of contract and negligence.

Ewing tendered defense of the suit…

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