A general contractor installs a commercial storefront window system. Because the flashing is installed incorrectly, rainwater enters the building during the first storm. The building owner sues the contractor, seeking the cost to remove and replace the defective window system and repair the water-damaged drywall and flooring inside. The contractor tenders the suit to its CGL insurer.

Notable Timestamps

[ 00:00:34 ] - A contractor faces a lawsuit after incorrectly installing window flashing that leads to water damage inside a building.

[ 00:04:48 ] - A central issue in these claims is determining if an insurance company actually owes defense and indemnity when a contractor's work causes property damage.

[ 00:06:26 ] - Commercial liability insurance is designed to cover unpredictable accidents and occurrences rather than serving as a guarantee for a contractor's faulty work.

[ 00:08:53 ] - Under the majority legal view, such as in Alabama, faulty workmanship does not qualify as an occurrence because the work was done purposefully without fortuity.

[ 00:10:00 ] - A growing minority view, seen in states like Pennsylvania and Colorado, broadly interprets these incidents as accidents unless the contractor intended the damage.

[ 00:10:55 ] - Even if a situation qualifies as an occurrence under a state's laws, insurers may still rely on specific policy exclusions, like j(5) and j(6), to limit coverage.

[ 00:11:26 ] - While the majority view denies indemnity for faulty workmanship itself, defective work that damages other property can still be classified as an occurrence.

Your PLRB Resources

Adjuster Resource Sheet: Faulty Work https://members.plrb.org/documents/adjuster-resource-sheet-faulty-work

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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.

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