The insured was hired to do waterproofing work at the claimant's house. This was to be done so that the claimant could proceed with renovations in the basement (and needed to stop any water intrusion before the renovations were done).

The insured did the following work: dug out all the dirt around the right side and back of the house, cleaned and re-pointed the wall, resealed it with waterproofing, repaired some foundation cracks, put dirt back where they had dug and then they put sod down.

They did nothing on the inside of the house. The insured had no plans for interior waterproofing as he felt it was not needed and that he had done the best waterproofing anyone could have with what he did on the outside.

After the insured did the waterproofing, the basement leaked and sustained damage. Since the insured was hired to do waterproofing to make the basement dry, would the damage to the basement be considered part of the insured work under exclusion l., or would it be considered resulting damages?

Maryland Subscriber

Based on what the insured said, it seems that he had completed all the work he planned to do before the damage occurred. Therefore exclusion l. would apply if the property damage was to the insured's work and arising out of it.

However, here the insured's work was on the outside of the building. If the waterproofing work on the outside was faulty and had to be redone, exclusion l. would prevent coverage for this. But this is not the case in your insured's situation because the property damage was to the inside of the house, to the basement area in which the insured did no work. The insured's work may have caused damage to another's property and this damage would not be excluded by the CGL form.

Of course, there is still a question of liability. We don't know for sure that the insured did, in fact, cause the water damage. Perhaps the basement would have leaked even had the insured not performed the waterproofing work; perhaps the leaking would have occurred regardless of the actions of the insured. We cannot answer questions about legal liability and you may want to check with an attorney in your area who is familiar with the law on this point. But, if the insured is liable for the water damage, the CGL form will not prevent coverage for a claim against him.