Construction Defect Claims: Navigating the CGL Contractual Exclusion Amid Varying Court Interpretations

Advocating Coverage From Perspectives of Commercial Developers, Design Professionals, Contractors and Insurers

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, June 24, 2014

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide counsel to construction companies and developers a historical view of CGL contractual liability exclusion and ISO form changes. The panel will explain the scope and applicability of the exclusion and its exceptions to construction defect claims, its impact on contractual indemnity agreements, and recent case law development for the construction industry.

Description

Whether the contractual liability exclusion includes breach of contract claims for defective workmanship has been addressed by many courts. Most courts hold that breach of contract claims based on the insured’s negligence are not “assumed” liabilities and do not fall within the contractual liability exclusion.

Prior to the recent ruling by the Texas Supreme Court in Ewing Construction, the Fifth Circuit’s ruling precluding coverage for a contractor’s construction defect shocked many policyholders in the construction industry. The history of this case illustrates the deep confusion over the scope of the exclusion.

The “insured contract” exception restores coverage where the insured contractually assumes the tort liability of another to pay for third party bodily injury or property damage.  Therefore, the scope of hold harmless and indemnification provisions in construction contracts must be carefully structured and negotiated. 

Listen as our authoritative panel of attorneys discusses the evolving interpretations of the CGL contractual liability exclusion and its exceptions in construction defect claims, the historical analysis of the exclusion, and the impact of the exclusion for construction contracts and indemnity agreements.

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Outline

  1. Overview of the contractual liability exclusion
  2. Historical GCL and ISO form changes
  3. Analysis of recent case law
  4. Ewing Constr. Co. Inc. v. Amerisure Ins. Co.
  5. Majority vs. minority views
  6. Scope of the contractual liability exclusion and exception for liabilities the insured would have in the absence of a contract or agreement
  7. Impact of the insured contract exception to the exclusion on the use of indemnity agreements in construction contracts

Benefits

The panel will review these and other key questions:

  • How has the contractual liability exclusion evolved over time and various ISO form changes?
  • What is the majority view of the scope of the contractual liability exclusion and its impact on defect liabilities for all parties to construction contracts?
  • What is the scope of the “insured contract” exception to the contractual liability exclusion and how does this impact the use of indemnity agreements in construction contracts?

Faculty

David M. Adelstein
David M. Adelstein
Atty
The Barthet Firm

Mr. Adelstein is Board Certified in Construction Law by The Florida Bar. He represents general contractors,...  |  Read More

Jonathan J. Kandel
Jonathan J. Kandel

Atty
Freeman Mathis & Gary

Mr. Kandel practices in the areas of commercial and complex litigation and specializes in commercial insurance coverage...  |  Read More

Douglas P. Skelley
Douglas P. Skelley

Member
Shidlofsky Law Firm

Mr. Skelley’s practice involves representing and counseling corporate policyholders in the area of insurance...  |  Read More

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