Posted on 01.31.25
First Circuit Rules on Important Coverage Issue for Contractors.
Source: https://www.jdsupra.com/, January 28, 2025
By: Christopher Sweeney, Conn Cavanaugh
First Circuit Court of Appeals Rules That Standard Commercial General Liability Policy Excludes Coverage for Downstream Property Damage When General Contractor’s Scope of Work Covers Entire Building
It is well-accepted that standard commercial general liability policies exclude coverage for construction contractors’ own defective work. That is, for example, a roofer who fails to properly seal penetrations when reroofing a home will not be afforded insurance coverage for the cost of correcting its mistakes (i.e., sealing the penetrations or redoing the job entirely). But what about the downstream – no pun intended – impacts of those mistakes: e.g., water damage to the home’s interior? Are those covered? In classic lawyer-speak, the United States First Circuit Court of Appeals says, “it depends.”[1]
