Throughout the 1990s and early 2000s, much ink was spilled over whether developers, contractors, and subcontractors could obtain insurance coverage for physical damage from defective construction under their CGL policies.  In most jurisdictions, this question was clearly decided by the states’ appellate court of last resort. Emblematic of cases finding coverage that case is the Florida Supreme Court’s holding in U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871 (Fla. 2007). In contrast, jurisdictions finding no coverage hold the Pennsylvania Supreme Court’s Kvaerner Metals Division of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006), decision as their polestar. It is worth noting that in some jurisdictions, legislatures stepped in to define the scope of coverage and in other jurisdictions the state’s highest courts even switched positions 180 degrees.  

While most jurisdictions have now resolved the issue, the issue remains open in several jurisdictions.  Recent decisions in Illinois, Massachusetts, and New York show the ongoing dispute continues. See Cornice & Rose International, LLC et al. v. Acuity, a Mutual Insurance Company, No. 23-1152, 2024 WL 4880102(7th Cir. Nov. 25, 2024); Endurance Am. Ins. Co. v. John Moriarty & Assocs., Inc., No. 1:23-CV-12550-JEK, 2024 WL 3849670 (D. Mass. Aug. 16, 2024); Lessard v. R.C. Havens & Sons, Inc., 104 Mass. App. Ct. 572, 241 N.E.3d 744, review denied, 494 Mass. 1109, 244 N.E.3d 1006 (2024); Burlington Ins. Co. v. PCGNY Corp., No. 1:20-CV-10381 (JGLC) (SDA), 2024 WL 4451303 (S.D.N.Y. Feb. 24, 2024), report and recommendation adopted, No. 20-CV-10381 (JGLC), 2024 WL 4212645 (S.D.N.Y. Sept. 16, 2024).

Our presentation will focus on the recent case decisions in this space.