Endorsements Preclude Coverage for Alleged Faulty Workmanship

Roofers doing repairs

Alleged faulty workmanship was barred by the Combination Construction Related Endorsement and Roofing Endorsement.

December 30, 2019
Tred R. Eyerly - Insurance Law Hawaii

The court found coverage for alleged faulty workmanship was barred by the Combination Construction Related Endorsement and Roofing Endorsement. Evanston Ins. Co. v. A&S Roofing, 2019 U.S. Dist. LEXIS 142828 (W.D. Okla. Aug. 22, 2019).

In 2010, A&S entered into a subcontract with the contractor to replace roofs on three buildings owned by Oklahoma Property Investors (OPI). Eagle was a subcontractor of A&S that installed the roofing. After the roofs were replaced, OPI filed suit against A&S, alleging that A&S provided 15-year warranties for the roofing work performed on the three buildings and that A&S breached each warranty by performing the work in a poor manner, resulting in failures to each of the roofs. OPI sought monetary relief including damages to its properties, of its tenants, and costs of repairs to its properties.

A&S's insurer, Evanston, denied coverage. Evanston pointed to the"legally obligated to pay" language of the CGL policy and argued coverage only extended to tort-based claims. Evanston argued the OPI lawsuit did not allege any tort claims, only warranty claims arising from contract. Second, Evanston contended the alleged "poor craftsmanship" giving rise to the claims in the OPI lawsuit that did not constitute an "occurrence" under the policy.

Mr. Eyerly may be contacted at te@hawaiilawyer.com



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