South Carolina Supreme Court Upholds Court of Appeals Bar Using “Your Work” and Product Replacement Exclusions to Deny Subcontractor Recovery


In Precision Walls, Inc. v. Liberty Mutual Fire Insurance Co., No. 2013-000787 (S.C. Ct. App. July 23, 2014), the general contractor contracted with Precision for the installation of exterior insulation board. Precision, being an approved applicator sold the installation board in question. After Precision completed its work, a masonry subcontractor began construction of the brick veneer wall which came into contact with the Precision product. The joint sealing tape installed by Precision began to come loose due to contact with the masonry contractor’s work product. Full repair could only be accomplished via the removal of brick as it now obstructed Precision’s work. The general contractor deducted the cost of tearing down and rebuilding the brick veneer wall from Precision’s contract. Precision sought reimbursement for this amount from its CGL policy issued by Liberty Mutual. Liberty Mutual denied coverage and Precision filed a declaratory judgment action. The trial court entered judgment for Liberty Mutual determining that the amount sought by Precision failed the “occurrence” requirement of the initial two pronged coverage analysis. The trial court also cited the “your work” exclusion. The Court of Appeals affirmed.

The opinion at issue today is the Supreme Court’s ruling, which affirmed and held that all of the damages fell within the “your work” exclusion. The court largely ignores the “occurrence” aspect of the case, yet ruled further “the defective tape, and all costs associated with its replacement, fall squarely within the exclusion.” The exclusion referenced is “your work”, and I have attached the opinion for further review.

Link http://sccourts.org/opinions/HTMLFiles/COA/5250.pdf

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