This is No “Accident”: Ohio Court Rules CGL Policy Doesn’t Cover Shoddy Subcontractor Work

One of the ongoing battles in construction defect coverage law around the country is whether a general contractor’s commercial general liability (“CGL”) policy obligates the insurer to defend and indemnify the general contractor in a lawsuit based on faulty work performed—not by the general contractor—but on its behalf by a subcontractor. Yesterday, Ohio joined a small minority of states when its high court ruled that damage from a subcontractor’s faulty work is not an accident triggering an insurer’s defense obligation.
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Pennsylvania District Court Finds No Coverage for Faulty Workmanship

In State Farm Fire & Casualty Co. v. McDermott (E.D. Pa. Oct. 14, 2014), a Pennsylvania federal district court recognized the well-established rule in Pennsylvania that faulty workmanship resulting in construction defects is not caused by an “occurrence.”  This coverage dispute arose out of work performed by McDermott at a residential housing development.  After McDermott completed its work on windows and doors, the homeowners discovered water intrusion.  They sued the developer, which, in turn, sued McDermott for negligence and breach
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