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Court Asks If Construction Defects Are "Property Damage" Insurance; Workmanship

Thursday, November 03, 2005 04:23 pm

 

A federal appeals court has asked the Texas Supreme Court to resolve conflicting state law and determine whether or not a contractor's Commercial General Liability insurance policy covers claims for defective workmanship.

A family contracted to purchase a new home to be constructed by Lamar Homes, Inc. The homeowners later filed suit against Lamar and its subcontractors alleging negligent design and construction, as well as breach of express and implied warranties.

Lamar tendered the lawsuit to its insurance carrier, Mid-Continent Casualty Co., seeking defense and indemnification under a CGL policy. The policy provided coverage for "property damage"caused by an "occurrence" that took pla [...]

 
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