Forrest Construction, Inc. v. The Cincinnati Insurance Company, 703 F.3d 359 (6th Cir. Jan. 11, 2013) (applying Tennessee law)

On January 11, 2013, the U.S. Court of Appeals for the Sixth Circuit held that an insurer cannot rely on the “your work” exclusion if the underlying complaint against a general contractor potentially suggests that the allegedly faulty work was performed by a subcontractor. The court held that the allegation that a general contractor “caused” work to be performed in the construction of an allegedly defectively built home implied the existence of a subcontractor and, therefore, triggered the subcontractor exception. In a standard CGL policy, coverage is excluded for damage to the insured’s own work, except if the damaged work or the work out of which the damages arises was performed on the insured’s behalf by a subcontractor.

Big-D Const. Corp. v. Take it for Granite Too, 2:11-CV-00621-PMP, 2013 WL 222260 (D. Nev. Jan. 22, 2013)

On January 22, 2013, the U.S. District Court for the District of Nevada predicted that the Nevada Supreme Court would find that a CGL carrier can owe a duty to indemnify a contractor for damages caused by defective construction even if the contractor was never been sued and the duty to defend was never triggered. The court found that the term “legally obligated to pay as damages” contained in the standard CGL insuring agreement is ambiguous and could be construed to cover damages the insured is contractually required to pay.

Engineering & Const. Innovations, Inc. v. L.H. Bolduc Co., Inc., 825 N.W.2d 695 (Minn. 2013)

On January 23, 2013, the Minnesota Supreme Court adopted a narrow interpretation of a blanket additional insured provision in a liability policy issued to a construction sub-contractor. The Court found that an additional insured endorsement which limited coverage to injury or damage caused by the acts or omissions of the named insured only provided coverage for loss due to the vicarious liability of the additional insured.

ECI subcontracted with Bolduc to build a shoring system to be created by driving metal sheeting into the ground to act as walls for the underground pits necessary to construct a sewer pipeline. Under the subcontract, ECI was responsible for determining where to drive the metal sheeting into the ground and Bolduc was responsible for installation of the sheeting. The subcontract also required Bolduc to indemnify ECI as follows: