{"id":904215,"date":"2025-04-10T15:42:24","date_gmt":"2025-04-10T21:42:24","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904215"},"modified":"2025-04-10T15:42:26","modified_gmt":"2025-04-10T21:42:26","slug":"ensuing-loss-provision-coverage-defective-workmanship","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/ensuing-loss-provision-coverage-defective-workmanship\/","title":{"rendered":"Coverage for Defective Workmanship Not Restored by Ensuing Loss Provision"},"content":{"rendered":"\n

Paul Ferland and Joshua Tumen | Property Insurance Law Observer<\/a><\/p>\n\n\n\n

In\u00a0Bob Robison Commercial Flooring Inc. v. RLI Insurance Company<\/em>\u00a0(2025 WL 852889 (8th Cir. 2025), the United States Court of Appeals for the Eighth Circuit determined that an ensuing loss provision of a builder\u2019s risk insurance policy did not restore coverage resulting from defective workmanship<\/a> where the insured failed to identify a separate covered peril.<\/p>\n\n\n\n

Background<\/p>\n\n\n\n

The insured was hired to install a vinyl gym floor with painted lines.  The insured then subcontracted the painting portion to another entity.  However, the painting entity\u2019s work was faulty, with issues such as crooked lines, incorrect markings, and smudges.  Because the defective painting could not be removed from the vinyl flooring, to correct the project error, the insured had to remove and replace the floor and paint new lines.<\/p>\n\n\n\n

The insured submitted a claim to its insurer seeking coverage for the loss under the subject builder\u2019s risk policy.  In relevant part, the policy contained the following language:<\/p>\n\n\n\n

PERILS COVERED<\/strong><\/p>\n\n\n\n

\u201cWe\u201d cover risks of direct physical loss or damage unless the loss is limited or caused by a peril that is excluded.<\/p>\n\n\n\n

PERILS EXCLUDED<\/strong><\/p>\n\n\n\n

2.  \u201cWe\u201d do not pay for loss or damage that is caused by or results from one or more of the following:<\/p>\n\n\n\n

* * *<\/p>\n\n\n\n

d.  \u201cDefects, Errors, Or Omissions In Property\u201d \u2013 \u201cWe\u201d do not pay for loss or damage caused by or resulting from inherent defects, errors, or omissions in covered property (whether negligent or not) relating to:<\/p>\n\n\n\n

1)  design or specifications;<\/p>\n\n\n\n

2)  workmanship or construction; or<\/p>\n\n\n\n

3)  repair, renovation, or remodeling.<\/p>\n\n\n\n

But if a defect, error or omission described above results in a covered peril, \u201cwe\u201d do not cover the loss or damage caused by that peril.<\/p>\n\n\n\n

The insurer denied the claim because \u201cexclusion d. cited above excludes coverage for loss or damage caused by errors in covered property due to workmanship.\u201d  The insured commenced litigation as a result of that denial.<\/p>\n\n\n\n

Analysis<\/p>\n\n\n\n

In the district court, the insured argued that the ensuing loss clause restored coverage because the damage to the floor was a covered peril that resulted from the painting entity\u2019s workmanship.  The insurer responded that the ensuing loss clause did not apply because the painting entity\u2019s work did not cause or lead to a second, non-excluded peril (e.g.<\/em>, a fire).<\/p>\n\n\n\n

On appeal, the Eighth Circuit broke down the issues as follows:<\/p>\n\n\n\n