Commercial General Liability

Liberty Mut. Fire Ins. Co. v. Kay & Kay Contr.
2013 U.S. App. LEXIS 23587 (6th Cir. Nov. 19, 2013)

This action arose out of a commercial general liability (“CGL”) policy issued by Liberty Mutual Fire Insurance Co. (“Liberty Mutual”) to MW Builders, Inc. (“MW Builders”) and Kay and Kay Contracting, LLC (“Kay & Kay”) for the construction of a Wal-Mart store in Morehead, Kentucky. Wal-Mart Stores, Inc. (“Wal-Mart”) contracted with MW Builders as general contractor for the construction of the building. MW Builders then entered into a subcontract with Kay & Kay to perform site preparation work and construct the building pad beneath the structure. Liberty Mutual issued the CGL policy to Kay & Kay, with MW Builders as an additional insured (the “Policy”). The Policy was the standard ISO (Insurance Services Office, Inc.) policy containing the standard coverage language. Specifically, the Policy provided: “This insurance applies to ‘bodily injury’ and ‘property damage’ only if… [t]he ‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence’ that takes place in the ‘coverage territory’…” The Policy defined “occurrence” to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The term “accident” was not defined in the Policy.


Continue Reading Sixth Circuit Court of Appeals, Applying Kentucky Law, Holds Subcontractor’s Allegedly Faulty Construction of a Building Pad and the Resulting Damages Is Not an “Occurrence” Under a Commercial General Liability Policy

Kuhn Construction Company v. Ocean and Coastal Consultants, Inc.
2010 U.S. Dist. LEXIS 71057 (D. Del. July 15, 2010)

Diamond State Port Corporation (“DSPC”) engaged Ocean and Costal Consultants, Inc. (“OCC”) to prepare engineered drawings, plans, and specifications for a project at the Port of Wilmington in Delaware. In soliciting bids, DSPC utilized the bid documents designed and prepared by OCC. Kuhn Construction Company (“Kuhn”) relied upon those documents to prepare its bid for work on the project. As the lowest bidder, Kuhn entered into a contract with DSPC.


Continue Reading U.S. District Court in Delaware Allows Contractor’s Tort Claims Against Engineer to Proceed – Also Holds Owner Not an Indispensable Party

Jalapenos, LLC v. GRC General Contractor, Inc.,
2007 PA Super 391, 2007 Pa. Super. LEXIS 4411 (Dec. 19, 2007)
Jalapenos, LLC, hired GRC General Contractor, Inc. to remodel a restaurant. The parties signed standard American Institute of Architects contracts (AIA Forms A101 and A201 – 1997). Under the contract, Jalapenos was required to obtain Builder’s Risk “all-risk” property insurance or equivalent, or inform the contractor in writing before the work began if it did not intend to purchase such insurance. Furthermore, if GRC was damaged by Jalapenos’ failure to maintain the required insurance without notifying GRC, then Jalapenos would be liable for all reasonable costs attributable to such failure.

Continue Reading Pennsylvania Superior Court Holds That Under AIA Contract Requiring Owner to Purchase Builders Risk Insurance, Contractor Not Liable for Fire Damage Caused By Subcontractor’s Negligence Despite Owner’s Failure to Purchase the Insurance

Plasticert, Inc. v. Westfield Insurance Company
2007 Pa.Super 124, 2007 Pa.Super.LEXIS 820 (Pa.Super Ct., May 1, 2007)
Plasticert manufactures thermoplastic wheels used in gravity flow product lines. A customer sued it because wheels that the customer purchased were breaking and cracking, and were determined not to have been manufactured to the customer’s specifications.
Plasticert carried general commercial liability (“CGL”) insurance and an umbrella policy both issued by Westfield Insurance Company. Plasticert filed a declaratory judgment action against Westfield, to determine, inter alia, coverage under the policies. The trial court determined, and the parties conceded, that the exclusionary language in both policies was similar so that the outcome of the instant matter would be the same under both policies.
Continue Reading PA Court Rules Coverage For Defectively Manufactured Wheel Barred By “Business Risk” Exclusion of CGL Policy

Stratton & Co., Inc. v. Argonaut Ins. Co.,
1996 Ga. App. LEXIS 303 (Ga. Ct. App., March 14, 1996).
Provision in the standard form of comprehensive general liability insurance policy which excludes coverage for “property damage to the named insured’s products arising out of such products or any part of such products,” did not apply because the damage the “building” constructed was not the named insured’s “product.”
Stratton & Co., Inc. (“Contractor”) completed the construction of an office building and parking deck for Goldome Credit Realty Corporation (“Owner”). After complaining about the quality of the Contractor’s work, the Owner filed a lawsuit against the Contractor. The Contractor tendered the defense of that lawsuit to its insurance company, Argonaut Ins. Co. (“Insurer”), but the Insurer denied coverage and refused to defend the Contractor. Contractor ultimately settled the lawsuit with the Owner and paid $468,464.
Continue Reading Georgia Court of Appeals Rules That a "Building" is not a "Product" Under CGL Insurance Policy