{"id":2642,"date":"2014-02-27T06:17:11","date_gmt":"2014-02-27T13:17:11","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=2642"},"modified":"2014-02-24T15:17:31","modified_gmt":"2014-02-24T22:17:31","slug":"texas-supreme-court-issues-ewing-opinion","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/texas-supreme-court-issues-ewing-opinion\/","title":{"rendered":"“Texas Supreme Court Issues Ewing Opinion”"},"content":{"rendered":"

Amy K. Wolfshohl – January 27, 2014<\/p>\n

Impact on Contractor’s Insurance Coverage<\/p>\n

On Friday, January 17, 2014, the Texas Supreme Court issued the long awaited and much anticipated\u00a0\u00a0Ewing Construction v. Amerisure Insurance\u00a0opinion.\u00a0\u00a0You may have heard that the ruling was a big victory for contractors, but\u00a0you are probably wondering what that means for contractor\u2019s insurance coverage for construction defects.\u00a0\u00a0In a few words, the Texas Supreme Court told insurance companies that they cannot deny coverage for contractors based upon the \u201cContractual Liability Exclusion\u201d unless the contractor has assumed liability in the contract over and above the duties they would have in the absence of a contract.<\/p>\n

The primary question that the court answered was:<\/p>\n

Does a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, without more specific provisions enlarging this obligation, \u201cassume liability\u201d for damages arising out of the contractor\u2019s defective work so as to trigger the Contractual Liability Exclusion?<\/p>\n

The court\u2019s answer was simple. No.<\/p>\n

Essentially, insurance companies like Amerisure were attempting to argue that simply by entering into a construction contract and agreeing to construct projects in a good\u00a0and workmanlike manner that the \u201cContractual Liability Exclusion\u201d excludes insurance coverage for construction defects. The Contractual Liability Exclusion that Amerisure relied upon in Ewing provided:<\/p>\n

2. Exclusions<\/p>\n

This insurance does not apply to:<\/p>\n

. . .<\/p>\n

b. Contractual Liability<\/p>\n

\u201cBodily injury\u201d or \u201cproperty damage\u201d for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:<\/p>\n

(1)\u00a0 That the insured would have in the absence of the contract or agreement; or<\/p>\n

(2)\u00a0 Assumed in a contract or agreement that is an \u201cinsured contract\u201d\u00a0. . . .<\/p>\n

In response, Ewing argued that the Contractual Liability Exclusion only comes into play when a contractor assumes liability that it did not have under general common law and that contractors already have a duty to construct projects in a good and workmanlike manner regardless of contractual language. The Texas Supreme Court agreed.<\/p>\n

Bottom line: Contractors still have coverage for construction defects on construction projects where the contractor agrees to perform the work in a good and workmanlike manner unless some other exclusion or exception applies.<\/p>\n

So when does a Contractual Liability Exclusion like the one above apply? Only when an insured assumes liability outside a duty that it would already have. This was the factual scenario presented in the\u00a0Gilbert\u00a0opinion that the Texas Supreme Court issued in 2010.\u00a0In\u00a0Gilbert, the Contractual Liability Exclusion applied because the contractor in that case agreed to assume liability for damage to property\u00a0adjacent\u00a0to the project that it ordinarily would not have in the absence of the contract provision.<\/p>\n

If you are a contractor and you have been denied coverage based upon this exclusion, you should consider re-examining the claim that you made by contacting an attorney. Contractors should also review their liability coverage with their risk advisors, not only to determine whether they have contractual liability covered or excluded, but also to get a detailed understanding of their coverage.<\/p>\n

via “Texas Supreme Court issues Ewing opinion” – Lexology<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Amy K. Wolfshohl – January 27, 2014 Impact on Contractor’s Insurance Coverage On Friday, January 17, 2014, the Texas Supreme Court issued the long awaited and much anticipated\u00a0\u00a0Ewing Construction v. Amerisure Insurance\u00a0opinion.\u00a0\u00a0You may have heard that the ruling was a big victory for contractors, but\u00a0you are probably wondering what that means for contractor\u2019s insurance coverage… Continue reading “Texas Supreme Court Issues Ewing Opinion”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,3],"tags":[72,23],"class_list":["post-2642","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-insurance-claims","tag-construction-contracts-2","tag-insurance-coverage","entry"],"jetpack_publicize_connections":[],"yoast_head":"\n"Texas Supreme Court Issues Ewing Opinion" - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/texas-supreme-court-issues-ewing-opinion\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\""Texas Supreme Court Issues Ewing Opinion" - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Amy K. Wolfshohl – January 27, 2014 Impact on Contractor’s Insurance Coverage On Friday, January 17, 2014, the Texas Supreme Court issued the long awaited and much anticipated\u00a0\u00a0Ewing Construction v. 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