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Is Faulty Work Ever An Insurable Occurrence?

David Thamann discusses two scenarios in which he believes “accidental” faulty workmanship on the part of the named insured should be covered under a CGL policy.

By David Thamann | Updated on March 07, 2011

Coverage for property damage resulting from faulty workmanship is an issue brought up many times before in the courts (see cover story on p. 14). Aside from the fact that the standard commercial general liability form has an exclusion that precludes coverage for property damage to the named insured’s own work, some courts focus not on the exclusion but on whether faulty workmanship can be considered an occurrence.

There is a widely accepted view that the named insured’s negligent work that damages his own work is not an insurable occurrence under a general liability policy because the consequences of negligent work are reasonably foreseeable—that is, not an accident. The reasoning here is that the insured should know what he is doing if he presents himself to a customer as a knowledgeable contractor, and the CGL form is not meant to be a warranty for the insured’s work.

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