{"id":899623,"date":"2022-02-17T15:13:54","date_gmt":"2022-02-17T22:13:54","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=899623"},"modified":"2022-02-17T15:14:03","modified_gmt":"2022-02-17T22:14:03","slug":"your-work-your-product-exclusion-2","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/your-work-your-product-exclusion-2\/","title":{"rendered":"Fifth Circuit Confirms: Insurer Must Defend Despite Your Work\/Your Product Exclusion"},"content":{"rendered":"\n<p>Nathan Cazier and Scott Thomas | <a href=\"https:\/\/www.paynefears.com\/insights\/fifth-circuit-confirms-insurer-must-defend-despite-your-workyour-product-exclusion\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Payne &amp; Fears<\/a><\/p>\n\n\n\n<p>The United States Court of Appeals for the Fifth Circuit recently confirmed that liability insurers have a duty to defend their insureds in construction defect cases when the underlying complaint alleges damage to property beyond the product and work of the insured \u2013 even if the complaint merely implies that the insured seeks such damage, without explicitly alleging so.&nbsp;<em>Siplast, Incorporated v. Employers Mutual Casualty Company<\/em>, No. 20-11076, 2022 WL 99303 (5th Cir. Jan. 11, 2022).<\/p>\n\n\n\n<p>The Archdiocese of New York replaced the roof over Cardinal Spellman High School in the Bronx, using a roofing membrane manufactured by Siplast, Inc. (\u201cSiplast\u201d). After a rainstorm a few years later, school officials reported water damage to the ceiling tiles throughout the school, and repair attempts only made the leaking worse. Siplast disputed that the leaks were its fault and refused to replace the roof, so the Archdiocese sued.<\/p>\n\n\n\n<p>Siplast tendered its defense to Employers Mutual Casualty Company (\u201cEMCC\u201d), which denied the claim pursuant to its policies\u2019 \u201c<a href=\"https:\/\/www.myconstructionexpert.com\/blog\/your-work-your-product-exclusion\/\" target=\"_blank\" rel=\"noreferrer noopener\">Your Product\/Your Work Exclusion<\/a>.\u201d Siplast then sued EMCC, seeking a declaratory judgment that it was entitled to a defense. Both parties moved for summary judgment, and the District Court ruled in favor of EMCC, finding that \u2013 while the underlying complaint did allege \u201cproperty damage\u201d that was caused by an \u201coccurrence\u201d \u2013 the alleged damage nevertheless fell within the policies\u2019 \u201cYour Product\/Your Work Exclusion.\u201d<\/p>\n\n\n\n<p>The Fifth Circuit reversed, explaining that, under Texas law, if a \u201ccomplaint alleges damage to and seeks damages for any property that is not the insured\u2019s product or directly subject to the insured\u2019s work,\u201d then the \u201cclaim falls outside of a \u2018your product\/your work\u2019 exclusion\u201d and the insurer has a duty to defend.\u201d If, however, a complaint \u201csolely alleges facts and damage to the insured\u2019s own products, or solely seeks to recover the costs to repair the insured\u2019s work, then it is covered by a \u2018your product\/your work\u2019 exclusion and the duty to defend remains dormant.\u201d<\/p>\n\n\n\n<p>The Fifth Circuit took exception with the District Court\u2019s \u201coverly narrow\u201d reading that \u2013 while the underlying complaint mentioned damage to property other than Siplast\u2019s roofing products \u2013 coverage was excluded because the complaint did not explicitly articulate a claim to recover for the damaged ceiling tiles. The Fifth Circuit confirmed that when determining whether the insurer owes a duty to defend, the insurer must focus on the factual allegations themselves, rather than the legal theories alleged. Here, the \u201cfactual allegations raised by the underlying complaint repeatedly point to damage to property other than Siplast\u2019s roof membrane system.\u201d These factual allegations create inferences that: (1) the Archdiocese asserted its cause of action based not only on damage to the roof membrane, but also on property damage to other parts of the school; and (2) that the water damage to non-roof-membrane property was caused by the failure of Siplast\u2019s faulty roof membrane system.<\/p>\n\n\n\n<p><strong>Takeaway:<\/strong><\/p>\n\n\n\n<p><em>Siplast<\/em>\u00a0reinforces the rule in Texas that the duty to defend must be construed broadly. So broadly, in fact, that courts are willing to find coverage by drawing inferences from factual allegations, even when a complaint doesn\u2019t expressly seek covered damage.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nathan Cazier and Scott Thomas | Payne &amp; Fears The United States Court of Appeals for the Fifth Circuit recently confirmed that liability insurers have a duty to defend their insureds in construction defect cases when the underlying complaint alleges damage to property beyond the product and work of the insured \u2013 even if the&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/your-work-your-product-exclusion-2\/\">Continue reading <span class=\"screen-reader-text\">Fifth Circuit Confirms: Insurer Must Defend Despite Your Work\/Your Product Exclusion<\/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":[9721,10885],"tags":[7757,11618,9895,156,10701],"class_list":["post-899623","post","type-post","status-publish","format-standard","hentry","category-property-damage","category-property-insurance-claims","tag-your-work-exclusion","tag-your-product-exclusion","tag-advise-consult","tag-property-damage-claim","tag-property-insurance-claims","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>Fifth Circuit Confirms: Insurer Must Defend Despite Your Work\/Your Product Exclusion - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"description\" content=\"\u201cproperty damage\u201d that was caused by an \u201coccurrence\u201d \u2013 nevertheless fell within the policies\u2019 \u201cYour Product\/Your Work Exclusion.\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\/your-work-your-product-exclusion-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fifth Circuit Confirms: Insurer Must Defend Despite Your Work\/Your Product Exclusion - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"\u201cproperty damage\u201d that was caused by an \u201coccurrence\u201d \u2013 nevertheless fell within the policies\u2019 \u201cYour Product\/Your Work Exclusion.\u201d\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/your-work-your-product-exclusion-2\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise &amp; 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