{"id":895491,"date":"2019-02-06T11:11:07","date_gmt":"2019-02-06T18:11:07","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=895491"},"modified":"2019-02-06T11:11:25","modified_gmt":"2019-02-06T18:11:25","slug":"ohio-bucks-trend-no-coverage-construction-defects-under-cgl-policy","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/ohio-bucks-trend-no-coverage-construction-defects-under-cgl-policy\/","title":{"rendered":"Ohio Supreme Court Bucks Recent Trend and Holds No Coverage for Construction Defects Under Commercial General Liability Policy"},"content":{"rendered":"\n<p>Heather Howell Wright | <a href=\"https:\/\/www.bradley.com\/insights\/publications\/2019\/01\/ohio-supreme-court-bucks-recent-trend-and-holds-no-coverage-for-construction-defects\">Bradley<\/a> | December 2018<\/p>\n\n\n\n<p>The insurance coverage analysis under a commercial general liability (\u201cCGL\u201d) insurance policy begins with the \u201cinsuring agreement.\u201d The standard CGL policy provides coverage for \u201cthose sums that the insured becomes legally obligated to pay as damages because of \u2018bodily injury\u2019 or \u2018property damage.\u2019\u201d The standard CGL policy further provides that the property damage must be caused by an \u201coccurrence,\u201d which is in turn defined as \u201can accident.\u201d Traditionally, courts had held that a construction defect was not an \u201caccident,\u201d and thus losses associated with such defects or faulty workmanship were not covered under a CGL policy. However, the recent trend has been for courts to find that construction defects or faulty workmanship do satisfy the \u201coccurrence\u201d and \u201cproperty damage\u201d requirements for CGL coverage. Yet, a recent decision out of Ohio bucks this trend of finding that claims of faulty workmanship may be covered under a CGL policy.<\/p>\n\n\n\n<p>In&nbsp;<em>Ohio N. Univ. v. Charles Constr. Servs. Inc.<\/em>, the Ohio Supreme Court recently held that construction defects do not constitute an occurrence under a standard-form CGL policy, and that an insurer has no obligation to defend or indemnify claims for defective work. The underlying claim in this case involved a contract between Ohio Northern University (\u201cOwner\u201d) and Charles Construction Services, Inc. (\u201cContractor\u201d) to build a new conference center and hotel. After the project was complete, Owner discovered extensive water damage and structural defects. Owner filed suit against Contractor, which in turn filed third-party claims against its subcontractors. Contractor tendered the defense to its insurer, Cincinnati Insurance Company (\u201cCincinnati\u201d), which intervened and sought a declaration that it had no duty to defend or indemnify Contractor.<\/p>\n\n\n\n<p>In the trial court, Cincinnati filed a motion for summary judgment on the declaratory judgment claim and asserted that claims for defective workmanship are not claims for \u201cproperty damage\u201d caused by an \u201coccurrence.\u201d The trial court granted Cincinnati\u2019s motion for summary judgment, finding there was no duty to defend or indemnify for faulty workmanship.<\/p>\n\n\n\n<p>On appeal, the Ohio Supreme Court considered the CGL policy definition of \u201coccurrence\u201d as an \u201caccident including continuous or repeated exposure to substantially the same general harmful conditions.\u201d The court opined that an accident was unexpected or unintended \u2013 involving fortuity. Because a subcontractor\u2019s faulty work is not fortuitous, it could not satisfy the \u201coccurrence\u201d requirement in the CGL.<\/p>\n\n\n\n<p>Importantly, the Ohio Supreme Court recognized that its decision conflicted with decisions in other states as well as the trend of finding coverage for construction defects \u2013 but the court explained that \u201c[r]egardless of any trend in the law,\u201d it was required to interpret the plain and unambiguous language of the policy. The court also noted that the Arkansas legislature had enacted a statute requiring that a CGL policy sold in Arkansas must define \u201coccurrence\u201d as including \u201cproperty damage resulting from improper workmanship.\u201d The&nbsp;<em>Ohio N. Univ.&nbsp;<\/em>Court noted that the Ohio General Assembly could pass similar legislation in response to the decision.<\/p>\n\n\n\n<p>While the recent trend across the country has been for courts to find that construction defects may be covered under a CGL policy, this case may indicate a pendulum swing in the other direction. Even if it proves to be an outlier, it highlights the importance of knowing which law will apply to the interpretation of insurance policies, because the law can vary significantly from one jurisdiction to another.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Heather Howell Wright | Bradley | December 2018 The insurance coverage analysis under a commercial general liability (\u201cCGL\u201d) insurance policy begins with the \u201cinsuring agreement.\u201d The standard CGL policy provides coverage for \u201cthose sums that the insured becomes legally obligated to pay as damages because of \u2018bodily injury\u2019 or \u2018property damage.\u2019\u201d The standard CGL policy&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/ohio-bucks-trend-no-coverage-construction-defects-under-cgl-policy\/\">Continue reading <span class=\"screen-reader-text\">Ohio Supreme Court Bucks Recent Trend and Holds No Coverage for Construction Defects Under Commercial General Liability 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":[4,30],"tags":[309,9895,392,4739,19,9120],"class_list":["post-895491","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-general-liability-policy","tag-occurrence","tag-advise-consult","tag-cgl-policy","tag-commercial-general-liability-policy","tag-construction-defects-2","tag-ohio","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ohio Supreme Court Bucks Recent Trend and Holds No Coverage for Construction Defects Under Commercial General Liability Policy - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"description\" content=\"The insurance coverage analysis under a commercial general liability (\u201cCGL\u201d) insurance policy begins with the \u201cinsuring agreement.\u201d\" \/>\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\/ohio-bucks-trend-no-coverage-construction-defects-under-cgl-policy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ohio Supreme Court Bucks Recent Trend and Holds No Coverage for Construction Defects Under Commercial General Liability Policy - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"The insurance coverage analysis under a commercial general liability (\u201cCGL\u201d) insurance policy begins with the \u201cinsuring agreement.\u201d\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/ohio-bucks-trend-no-coverage-construction-defects-under-cgl-policy\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise &amp; 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