The Windsor School (Owner) hired the contractor (LKC) to build a new gymnasium.  LKC hired a subcontractor to lay the floor. Within months of completion, the architect notified the contractor of flooring deficiencies. Lee Kennedy Co. v. Arch Insurance Company, Dist. Court, D. Massachusetts 2019

When the contractor held the sub’s retainage, the sub sued. The contractor counter-sued saying the work was improperly done and the holdback was needed to repair it. 

The contractor then made a claim under the General Liability insurance policy for coverage of the costs LKC it expected to incur in order to remedy the Project flooring. LKC had a rolling wrap insurance program for general liability claims and this project along with the subcontractors were enrolled in this Contractor Controlled Insurance Policy CCIP.  CCIP policies cover different projects for multiple years by endorsements to the main policy.

The policy EXCLUDED

Claims where the insured contractor had to pay damages because it assumed liability in a contract or agreement

(there would be coverage for personal injury or property damage the insured was liable for if it arose out of legal duties imposed on everyone –  tort)


LKC said insurance should cover this repair cost, we had to fix the floor.  The insurer said you had to fix it only because your contract with the owner required it – not covered by insurance.


Not covered.


General liability insurance covers accidents not broken contract promises.  Insurers don’t intend to protect against badly done construction work