Source: http://www.claimsjournal.com, September 30, 2013
By: Burke Coleman
Coverage for defective construction claims under commercial general liability (CGL) policies remains an important and frequently contested issue, and the last year has seen significant developments on the issue.
Courts have taken varying approaches to the question and applied different parts of the CGL policy as they define the legal framework for analyzing the issue. As the landscape changes, insurers, contractors and damaged parties must be aware of the legal analyses and differing a
Last year, the Ohio Supreme Court determined that defective construction itself does not trigger coverage.
Westfield v. Custom Agri Systems
In Westfield Ins. Co. v. Custom Agri Systems, Inc., 2012 Ohio 4712, the court took a hard-line approach and found that faulty workmanship lacks the requisite fortuity to constitute an “occurrence” under the policy. The court reasoned that a CGL policy is not intended to protect contractors against every risk of operating a business and does not insure against the insured’s faulty work itself. Rather, a CGL policy insures only the consequential damages to other property that may stem from that work. The decision forecloses any arguments that defective work itself may be covered, but acknowledges that collateral damage to non-defective property may constitute an occurrence and trigger coverage.…
Source: http://www.mondaq.com, June 19, 2013
By: Edmund Kneisel and Carl A. Salisbury, Kilpatrick Townsend & Stockton LLP
On June 4, 2013, the Connecticut Supreme Court joined a growing number of state high courts to rule that faulty workmanship on a construction project can be covered by commercial general liability insurance policies. The case is Capstone Building Corp. v. American Motorists Insurance Company (the opinion was officially released on June 11, 2013). Capstone answers a question that has been raised and resolved in a great many insurance coverage cases: Whether damage resulting from alleged construction defects and faulty workmanship is an “occurrence” that is covered “property damage” under the products completed operations hazard provisions of a commercial general liability insurance policy?
Three years after completion of a $39 million housing project, the University of Connecticut forwarded a letter to Capstone setting forth a veritable litany of complaints about the construction, which the Connecticut court summarized as consisting generally of four categories of claims: (1) “damage to non-defective property stemming from defective construction,” (2) release of carbon monoxide from improperly vented water heaters; (3) defective work in violation of building codes; and (4) costs of repairing the damaged work. The matter was mediated, resulting in a $1 million settlement of UConn’s claims. However, AMICO denied all coverage, refused to participate in the mediation, and the coverage dispute ended up in litigation in federal district court, which certified the coverage issue to the Connecticut Supreme Court.…
Source: http://www.mcall.com, May 15, 2013
By: Peter Hall
The owner of a power plant in Upper Mount Bethel Township has agreed to stop burning coal as part of a settlement in a lawsuit by two downwind states over air pollution.
NRG Energy, which acquired the Portland Generating Station last year in a merger with GenOn, will shut down two coal-fired generating units by June 2014 as part of the settlement with New Jersey and Connecticut, the company said in a statement Wednesday.…
Source: http://articles.courant.com, November 2, 2012
By: Christopher Hoffman
The developer seeking to build luxury homes on Cedar Mountain agreed in June to pay a $741,000 penalty to resolve more than 600 alleged violations of the federal Clean Water Act nationwide.
Toll Brothers, one of the nation’s largest homebuilders, allegedly failed over a period of years to control runoff from its construction sites, polluting nearby streams and rivers, according to a June 20 Environmental Protection Agency press release.
The alleged violations were concentrated in Virginia and Maryland, the release says.
“The majority of the alleged violations involve Toll Brothers’ repeated failures to comply with permit requirements at its construction sites, including requirements to install and maintain adequate storm water pollution controls,” the release reads.
The settlement covers 370 sites in 23 states, including 13 in Connecticut, according to the EPA website.
Toll Brothers Vice President John F. Lehane acknowledged a problem in 2009 at a site in Prospect, which he said the company responded to quickly after an EPA inspection.
But Lehane said it was “not accurate” to say there were violations at the 13 Connecticut sites. Toll Brothers voluntarily included the sites in the settlement, he said.
Asked why the company would submit the sites for the settlement if there were no violations, Lehane said, “That goes to the terms of the consent decree, and I can’t really discuss the terms of the consent decree because it is not approved by the judge.”…
The insurer that issued the performance bond for a portion of the troubled Interstate-84 construction in Connecticut will pay $17.5 million to settle claims involving installation of defective drains. The payment from the insurer on behalf of the primary contractor for the project will allow the state to begin repairing the defective drains along a three-mile stretch of highway. Many of the defective drains lead nowhere or are clogged with debris, with others connected with substandard, cracked and leaking pipes. The state estimates that it will cost $27 million to repair them. Under the agreement, the state retains the right to sue the contractor for additional funds. The contractor has already been sued by its insurer, who accuses the firm of concealing funds and purchasing luxury cars with company resources.…