{"id":891586,"date":"2017-01-31T16:11:13","date_gmt":"2017-01-31T23:11:13","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891586"},"modified":"2017-01-31T16:11:13","modified_gmt":"2017-01-31T23:11:13","slug":"subcontractor-exception-work-exclusion-not-apply-coverage-subcontractors-policy","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/subcontractor-exception-work-exclusion-not-apply-coverage-subcontractors-policy\/","title":{"rendered":"Subcontractor Exception to “Your Work” Exclusion Does Not Apply to Coverage Under Subcontractor’s Policy"},"content":{"rendered":"

Tred R. Eyerly | Insurance Law Hawaii<\/a> | January 25, 2017<\/p>\n

The Arizona Court of Appeals overturned the trial court’s determination that the general contractor was entitled to coverage under the subcontractor’s exception to the “Your Work” exclusion. Double AA Builders v. Preferred Contrs. Ins. Co., 2016 Ariz. App. LEXIS 294 (Ariz. Ct. App. Dec. 30, 2016).<\/p>\n

Harkins Theatres hired Double AA Builders, Ltd. to serve as general contractor to\u00a0build a theater complex. Double AA subcontracted with Anchor Roofing, Inc. to install the roof. Anchor was the “Named Insured” under a policy issued by Preferred Contractors Insurance Company, LLC. Double AA was an “Additional Insured” under the Preferred policy.<\/p>\n

After the theater project was completed, the roof began to leak, causing damage to work performed by other subcontractors. Double AA replaced the roof and sued Anchor and Preferred seeking indemnification. Double AA sought to recover only the cost of replacing the roof, and not the cost of\u00a0the damage to other property.<\/p>\n

Preferred and Double AA filed cross-motions for summary judgment on the question of whether Double AA’s cost of replacing the roof was a covered loss under the policy. The court granted Double AA’s motion, concluding that coverage was triggered by an “occurrence” and “property damage,” and that the subcontractor exception clause removed the claim from the policy’s “your work” exclusion.<\/p>\n

The Court of Appeals reversed. The exclusion removed from coverage “‘property damage’ to ‘your work’ arising out of it or any part of it and included in the ‘products completed operations hazard.'” The exception applied “if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.” “Your” and “your” meant “the Named Insured.” “Products completed operations hazard” was defined as “including all . . . ‘property damage’ occurring away from the premises you own or rent arising out . . . ‘your work.'”<\/p>\n

Here, the exclusion applied because the case related only to Anchor’s defective work. The\u00a0exception did not apply, however. The only Named Insured was Anchor, and Anchor performed the defective work itself – not through a subcontractor. The reference in the “subcontractor exception” to work “performed on your behalf by a subcontractor’ referred to work performed by a subcontractor of Anchor only – not to Anchor’s work performed as a subcontractor of Double AA. Because the policy defined “you” and “your” as the “Named Insured,” the exception applied when someone else did work as the named insured’s subcontractor, not when the named insured was a subcontractor. Double AA was an “Additional Insured”, not a “Named Insured” under the policy.<\/p>\n

Therefore, the “subcontractor exception” to the “your work” exclusion did not apply. The policy did\u00a0not provide coverage to Double AA for repairing Anchor’s faulty workmanship.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tred R. Eyerly | Insurance Law Hawaii | January 25, 2017 The Arizona Court of Appeals overturned the trial court’s determination that the general contractor was entitled to coverage under the subcontractor’s exception to the “Your Work” exclusion. Double AA Builders v. Preferred Contrs. Ins. Co., 2016 Ariz. App. LEXIS 294 (Ariz. Ct. App. Dec.… Continue reading Subcontractor Exception to “Your Work” Exclusion Does Not Apply to Coverage Under Subcontractor’s Policy<\/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":[1],"tags":[7757,9895,153,23],"class_list":["post-891586","post","type-post","status-publish","format-standard","hentry","category-insurance-estimates","tag-your-work-exclusion","tag-advise-consult","tag-arizona","tag-insurance-coverage","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nSubcontractor Exception to "Your Work" Exclusion Does Not Apply to Coverage Under Subcontractor's Policy - 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