Known Injury or Damage Exclusion not Applicable in Case of Continuing and Progressive Water Infiltration Resulting from Defective Construction


AUTO DEALER + COVERAGE BUZZ

I recently posted an article, CGL Coverage:  “Known Injuries or Damages” in Minnesota and Beyond”, addressing the “Known Injury or Damage” provision in CGL policies.  In August 2014, the Connecticut Supreme Court addressed the provision in the context of a construction defect case involving ongoing water infiltration issues in Travelers Cas. & Sur. Co. of Am. v. Netherlands Ins. Co., 312 Conn. 714, 95 A.3d 1031 (2014).  Although the insured contractor was placed on notice of the infiltration problems before the policy inception date, the court held the Known Injury or Damage provision did not bar coverage because extrinsic evidence of when the insured was placed on notice could not be used and the underlying complaint did not “specify exactly” when the insured was first placed on notice of the problem.

In 1994, the state of Connecticut contracted with Lombardo to perform masonry for the construction of the…

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