{"id":902028,"date":"2023-12-19T15:22:52","date_gmt":"2023-12-19T22:22:52","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=902028"},"modified":"2023-12-19T15:22:54","modified_gmt":"2023-12-19T22:22:54","slug":"construction-defect-cases-commercial-general-liability-illinois","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-defect-cases-commercial-general-liability-illinois\/","title":{"rendered":"Illinois Supreme Court\u00a0Changes\u00a0Law for Construction Defect Coverage"},"content":{"rendered":"\n<p>Kenneth Gorenberg and Kelly K. Koss | B<a href=\"https:\/\/btlaw.com\/en\/insights\/alerts\/2023\/illinois-supreme-court-changes-law-for-construction-defect-coverage\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">arnes &amp; Thornburg<\/a><\/p>\n\n\n\n<p><strong>Highlights<\/strong><\/p>\n\n\n\n<p><em>The Illinois Supreme Court opened the door for commercial general liability (CGL) policies to potentially cover construction defect cases<\/em><\/p>\n\n\n\n<p><em>The court held CGL policies can provide coverage in Illinois for damage caused by inadvertent construction defects<\/em><\/p>\n\n\n\n<p><em>This decision reverses a previous tendency among Illinois courts to find no coverage for faulty workmanship either because it is inherently not accidental or because there was no damage beyond the insured defendant\u2019s scope of work<\/em><\/p>\n\n\n\n<p>The Illinois Supreme Court has opened the door for commercial general liability (CGL) insurance policies to cover <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/mediation-construction-defect-cases\/\">construction defect cases<\/a>. Overturning years of lower court cases, the court held that CGL policies can provide coverage for damage caused by inadvertent construction defects. Faulty workmanship qualifies as an accidental \u201coccurrence\u201d and that actual damage, even within the insured\u2019s scope of work, is insurable \u201cproperty damage.\u201d\u00a0<\/p>\n\n\n\n<p>In\u00a0<a href=\"https:\/\/ilcourtsaudio.blob.core.windows.net\/antilles-resources\/resources\/855de139-4267-4ea7-ba1b-ff51dd6d99f1\/Acuity%20v.%20MI%20Homes%20of%20Chicago,%20LLC,%202023%20IL%20129087.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Acuity, a Mutual Insurance Co. v. M\/I Homes of Chicago LLC<\/em><\/a>, the Illinois Supreme Court held that homebuilder M\/I Homes may be covered against allegations that its subcontractors caused water damage \u201cby using defective materials, conducting faulty workmanship and failing to comply with applicable building codes.\u201d There were two key prongs to the court\u2019s holding.<\/p>\n\n\n\n<p>First, the court rejected the notion that there could be no \u201cproperty damage,\u201d as defined by the policy, unless the underlying complaint alleged damage to something beyond the townhomes that M\/I Homes constructed. Although faulty workmanship in and of itself is not \u201cproperty damage,\u201d the court held that, under the language of a CGL policy, \u201cresulting water damage to the interior of the completed units plainly constitutes physical injury to tangible property.\u201d<\/p>\n\n\n\n<p>Second, the court rejected the insurance company\u2019s argument that \u201cdamage to any portion of the completed project caused by faulty workmanship can never be caused by an accident because it is always the natural and probable risk of doing business.\u201d The court held that \u201cthe unintended and unexpected harm caused by negligent conduct\u201d is an \u201caccident\u201d and therefore an \u201coccurrence\u201d that can be insured under a CGL policy.<\/p>\n\n\n\n<p>The court did not decide the ultimate issue of whether Acuity had a duty to defend M\/I Homes in the underlying suit. Instead, the court remanded the case to the trial court to consider whether certain exclusions in the CGL policy may preclude the duty to defend.<\/p>\n\n\n\n<p>This new decision reverses a previous tendency among Illinois courts to find no coverage for faulty workmanship, either because it is inherently not accidental or because there was no damage beyond the insured defendant\u2019s scope of work. Now, there is more reason for optimism among policyholders in the construction industry \u2013 including developers, general contractors and subcontractors \u2013 as policyholders facing construction defect claims in Illinois may now be able to obtain coverage for these claims under their CGL policies.<\/p>\n\n\n\n<p>Policyholders facing claims for inadvertent construction defects should carefully analyze the allegations of the underlying complaint and the exclusions contained in their policies to determine if coverage may be available to them under their policies. Policyholders in the construction industry should also carefully consider the implications of any exclusions when purchasing CGL policies.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\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\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kenneth Gorenberg and Kelly K. Koss | Barnes &amp; Thornburg Highlights The Illinois Supreme Court opened the door for commercial general liability (CGL) policies to potentially cover construction defect cases The court held CGL policies can provide coverage in Illinois for damage caused by inadvertent construction defects This decision reverses a previous tendency among Illinois&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-defect-cases-commercial-general-liability-illinois\/\">Continue reading <span class=\"screen-reader-text\">Illinois Supreme Court\u00a0Changes\u00a0Law for Construction Defect Coverage<\/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":[10791,4,30],"tags":[],"class_list":["post-902028","post","type-post","status-publish","format-standard","hentry","category-commercial-general-liability-policy","category-construction-defects","category-general-liability-policy","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>Illinois Supreme Court\u00a0Changes\u00a0Law for Construction Defect Coverage - Advise &amp; 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