{"id":897716,"date":"2020-07-16T11:17:37","date_gmt":"2020-07-16T17:17:37","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=897716"},"modified":"2020-07-16T11:17:39","modified_gmt":"2020-07-16T17:17:39","slug":"open-door-cgl-claims-construction-defects","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/open-door-cgl-claims-construction-defects\/","title":{"rendered":"Michigan Supreme Court Opens Door to CGL Claims for Construction Defects"},"content":{"rendered":"\n

Jeffrey L. Hamera | Duane Morris<\/a><\/p>\n\n\n\n

The Michigan Supreme Court overturned precedent and joined the jurisdictions that allow damages arising from construction defects<\/a> to be the basis of a claim against a subcontractor\u2019s comprehensive general liability (\u201cCGL\u201d) policy<\/a> written on a 1986 ISO form. This decision opens the door to CGL claims for construction defects that had been shut in Michigan since\u00a0Hawkeye-Security Ins Co v Vector Constr Co<\/em>, 185 Mich App 369; 460 NW2d 329 (1990).<\/p>\n\n\n\n

Skanska USA Building Inc. (\u201cSkanska\u201d) incurred costs correcting the defective work of its subcontractor, M.A.P. Mechanical Contractors, Inc. (\u201cMAP\u201d), on a medical center renovation project. Skanska was an additional insured on MAP\u2019s CGL policy. MAPs installed expansion joints backwards, which resulted in damage to concrete, steel and the heating system. Skanska repaired the damage and sent the bill to MAP and a claim to the CGL insurer.<\/p>\n\n\n\n

The insurer, Amerisure, asserted that MAP\u2019s defective work was not an \u201coccurrence\u201d as defined in the policy: \u201can accident, including continuous or repeated exposure to substantially the same general harmful conditions\u201d. \u201cAccident\u201d was not defined in the policy. The trial court applied the definition of \u201caccident\u201d in Hawkeye-Security Ins Co v Vector Constr Co, 185 Mich App 369 (1990), and denied Amerisure\u2019s motion, without determining whether an \u201caccident\u201d had occurred. The appellate court reversed, reasoning that Skanska could recover only for damage to a third-party\u2019s property and not its \u201cown work\u201d. However, as the Supreme Court noted, work by a subcontractor was excepted from the \u201cown work\u201d exclusion in the policy.<\/p>\n\n\n\n

The Michigan Supreme Court, in a unanimous decision, held that an insured can recover under MAP\u2019s CGL policy, which has standard \u201cpost-1986\u201d language, for damages to the insured\u2019s work that is caused by unintentionally faulty work. The Court interpreted language changed from the 1973 version of standard CGL polices to the 1986 revisions to affect the meaning of accident\u201d and allow it to include business risks related to faulty workmanship. Also, the CGL policy did not tie \u201coccurrence\u201d to the ownership of the damaged property. Regarding the definition of \u201caccident\u201d the Court rejected the argument that an accident must be linked to the common law concept of \u201cfortuity\u201d and accepted that a deliberate act performed negligently can be an \u201caccident\u201d.<\/p>\n\n\n\n

This case provides a precedent in Michigan for overcoming restrictions on recovering the costs of correct defective work resulting from a subcontractor\u2019s negligence.<\/p>\n","protected":false},"excerpt":{"rendered":"

Jeffrey L. Hamera | Duane Morris The Michigan Supreme Court overturned precedent and joined the jurisdictions that allow damages arising from construction defects to be the basis of a claim against a subcontractor\u2019s comprehensive general liability (\u201cCGL\u201d) policy written on a 1986 ISO form. This decision opens the door to CGL claims for construction defects… Continue reading Michigan Supreme Court Opens Door to CGL Claims for Construction Defects<\/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":[9895,392,4739,19],"class_list":["post-897716","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-general-liability-policy","tag-advise-consult","tag-cgl-policy","tag-commercial-general-liability-policy","tag-construction-defects-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nMichigan Supreme Court Opens Door to CGL Claims for Construction Defects - 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