Third Circuit Court of Appeals Concludes “Soup to Nuts” Policy Does Not Include Faulty Workmanship Coverage

Contractor hammering floor

The Third Circuit warned about the application of the “reasonable expectations” doctrine in future similar cases as it could negatively impact the insurance market in Pennsylvania.

December 11, 2018
Timothy Carroll - White and Williams LLP

Earlier this month, in Frederick Mutual Insurance Company v. Hall, the U.S. Court of Appeals for the Third Circuit concluded that coverage for faulty workmanship claims is “simply not the kind of coverage insurance agents and insurance companies expect to provide” to construction industry professionals “unless the insured explicitly requests such coverage.” 2018 U.S. App. LEXIS 31666, at *9 (3d Cir. Nov. 8, 2018). In Hall, a stone masonry contractor was sued by its customer for causing over $350,000 in property damage resulting from “substandard and defective work” performed on the customer’s residence. The insurer sought a declaration that it owed neither a defense nor indemnity for those damages because, under Pennsylvania law, the policy did not cover property damage caused by faulty workmanship.

Mr. Carroll may be contacted at carrollt@whiteandwilliams.com



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