Arbitration & Mediation

Business Risk Exclusions Do Not Preclude Coverage for Non-Defective Work even if CAUSED by Defective Work

By Victoria Pynchon

Because litigation is so often settled with insurance dollars, from time to time we bring you updates on recent judicial interpretations of common policy terms.  The following article answers the question in the Fifth Circuit whether CGL policies cover certain types of construction defect claims.

(left, author Schramek)

"Fifth Circuit Narrowly Construes 'Business Risk' Exclusions in CGL Policies"
Fulbright Briefing
Adam T. Schramek
February 2009

A recurring dispute between insurance companies and Commercial General Liability (“CGL”) policyholders concerns whether CGL policies provide coverage for construction defect claims. In its recent decision in Mid-Continent Casualty Co. v. JHP Development, Inc., No. 05-50796 (January 28, 2009), the Fifth Circuit takes the latest step in Texas jurisprudence on the issue, concluding that the “business risk” exclusions in such policies, at least as currently drafted, do not exclude coverage for damage to a contractor’s non-defective work even if caused by his own defective work.

Read on here.

We owe the head's up on this article to whoever convinced Fulbright's powers that be that the firm should micro-blog on twitter here:  @Fulbright.

Full post as published by Settle It Now Negotiation Blog on February 02, 2009 (boomark / email).