A bewildering 12 months of state and federal court rulings have further complicated the insurance and liability landscape for homebuilders and contractors facing homeowners' Chinese drywall damage claims, attorneys and brokers say.

Nine state and federal courts and one state legislature over the past year have addressed whether a construction defect—a defective product or faulty workmanship—is fortuitous and therefore an occurrence under the commercial general liability insurance policy.

Four jurisdictions determined it is; three said no; two ruled that a construction defect that causes consequential damage to property other than the work product is an occurrence; and one federal court contributed to conflicting case law that has developed in Oregon since its high court ruled in 2000 that a construction defect is not an occurrence (see “Scorecard” sidebar for an overview of all these decisions).

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.