Ohio Supreme Court Follows Precedent in Unanimous Decision Which Rules that the Subcontractor Exception to the Property Damage to Your Work Exclusion (ISO CGL Exclusion L.)
Does not Apply to Faulty Work.
See the link to the full decision - it’s relatively simple to follow:
In a nut shell the decision basically reiterates Ohio case law that faulty workmanship caused by a contractor or a sub-contractor is not an occurrence // accident because it is not fortuitous.
How can a General Contractor or a Sub-Contractor cover this exposure? With a properly constituted Contractors Professional Liability policy - because a Contractors Professional Liability policy is NOT triggered by an occurrence // accident; but by a Claim for Damages resulting from the rendering or failure to render Professional Services. What Professional Services you may ask? Construction Management Services. But you say you are not a CM - not to worry - with the right policy language this will not be an issue.
Caveat Emptor: All Contractors Professional Liability policies are not created equal. Most require modifications to certain exclusions and definitions; and without them coverage for claims similar to those detailed in the above decision would not be covered.
See the below links to our website for more information. As a specialty insurance broker, we stand ready to assist retail insurance brokers, construction firms, and attorneys, not just in Ohio but countrywide, in making sure that you or your clients have an insurance policy where coverage is provided for construction related Claims not covered by a CGL policy because there:
(i) was no accident // occurrence as a matter of law (i.e. Ohio Supreme Court decision);
(ii) is Property Damage that is excluded by operation of one of the CGL policy's Property Damage Exclusions; or
(iii) is no Bodily Injury or Property Damage, just pure Economic Loss.
Posted Wednesday, October 31 2018 11:35 AM
Tags : Construction, Professional Liability, Sub-Contractor
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