The Iowa Supreme Court determined that a consumer fraud claim against a contractor was not an "occurrence" and was not covered under the CGL policy. Dostart v. Columbia Ins. Group, 2025 Iowa Sup. LEXIS 48 (April 18, 2025).

Tyler Custom Homes entered into a construction contract with the Dostarts to construct a custom-built, single-family residence, with construction to be substantially completed on or before June 11, 2018. On September 17, 2019, the Dostarts filed suit against Tyler Custom Homes for failure to compete construction. The Dostarts asserted, among other things, consumer fraud under the Iowa Code. Tyler Custom Homes' insurer, Columbia Insurance Group, defended under a reservation of rights.

The jury rejected the Dostarts' breach of contract and warranty claims, but it returned a verdict in their favor on their consumer fraud claims and for exemplary damages. Columbia informed Tyler Custom Homes that the jury's verdict was not covered under the CGL policy. Accordingly, Columbia refused to indemnify the judgment. The Distarts were unable to collect their judgment directly from Tyler Custom Homes, and sued Columbia.