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Collateral Damages To Defective Work Are Cgl-covered

Monday, April 11, 2011 10:59 am


Insurance - Defective Construction

Younglove Construction, LLC v. PSD Development, LLC, et al, 2011 U.S. Dist. Lexis 9029 (D. Ohio Jan. 31, 2011)

In Ohio, CGL policies that don't cover claims for defective construction might nonetheless cover claims that can be categorized as seeking "consequential" damages.

Younglove Construction, LLC (Younglove) was the general contractor on a PSD Development, LLC (PSD) project to design and build an animal feed manufacturing plant. As a subcontractor on the project, Custom Agri Systems, Inc. (CAS), designed and built a steel grain bin. PSD was unsatisfied with the work performed and the quality of the materials used, including the steel grain bin CAS provided. PSD sought resulting damages, which CAS demanded its commercial general liability (CGL) policy cover. The insurance company claimed it had no duty to defend or indemnify CAS. An Ohio district court originally ruled otherwise, but it most recently granted the insurance company's motion for reconsideration on that point.

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