Contractor’s defective work not covered as property damage by GL insurance
If built wrong to start – not an incident for coverage purposes
Mass weighs in on vexing question - bad work not covered
FACTS
Lessard v RC Havens Mass Appeals Court 2024
Parties and lead up
- Lessard – homeowner
- Havens – general contractor
- Main Street America (MSA) – Insurer for general contractor
- A home newly constructed by Havens for Lessard had problems. Structural members were inadequate to support their weight bearing duties. Extensive work was needed for the fix. Separate problems included roof deck, siding, and metal roof which all had to be replaced.
The homeowner’s case against the general contractor went to a jury who awarded over $270,000 for the defective work.
The general contractor’s General Liability insurer MSA intervened in the case seeking a ruling that there was no coverage to Havens under the General Liability policy because defective work was not an incident and therefore not covered.
ISSUES
Does a contractor’s General Liability insurance cover defective work?
RULING
No. Repairing the defective work is not insured.
REASONS
Defective construction is not “property damage”. The cost of fixing it is not covered by General Liability insurance. Defective construction is wrong from the outset not initially proper and injured thereafter. It is not an occurrence under the policy language.
Property damage resulting from the defective work might be but this case did not present enough facts to decide that question. (i.e. faulty window replacement – not covered / surrounding leak damage repairs – may be covered).
COMMENT
State by State, Courts around the country address this question. Proof of separate property damaged as a result of the defective construction could be insurable.