b"OSHA & Workers' Comp Defense for Your BusinessGary W. Auman William H. Barney,IIILegal Services Plan UpdateCOMMERCIAL GENERAL LIABILITY POLICIES AND FAULTY WORKMANSHIP:COVERED?937-223-6003amfdayton.com Abigail K. White Douglas S. JenksDouglas S. Jenks, MRCA General Counsel, Auman, Mahan & FurryDo commercial general liability (CGL) policies coverfor Ohio Northern University.The university had faulty workmanship claims?Generally, most CGLcontracted with a general contractor, Charles policies will not cover property damage resultingConstruction Services, to oversee the project.In turn, from the insureds faulty work under the your workthe general contractor hired several subcontractors coverage exception.But what about the insuredsto perform the work.Charles Construction also subcontractors? purchased a CGL policy from the Cincinnati Insurance The Case of Topeka, a Waterlogged Dinosaur Company.Imagine a roofing contractor installed a roof over aAfter construction ended in 2011, the university new natural history museum.This museum containeddiscovered significant water damage from the worlds largest fossilized Tyrannosaurus Rexhidden leaks.The university claimed that the skeleton, affectionately named Topeka in honor ofgeneral contractor, Charles Construction, and its the legendary birthplace of the MRCA.Six monthssubcontractors, were responsible. after completion, the museum discovered that water,But it was more than just some water leaks.While allegedly leaking from the roof, damaged the museumrepairing the water damage, the university discovered structure, and also dear Topeka.The museum suedsignificant structural defects, which were estimated to the general contractor that oversaw the buildingcost $6,000,000 to repair.Legal mayhem ensued.project, blaming it for damaging the museum and itsThe university sued Charles Construction. It famed T-Rex.The general contractor turned to thesued several subcontractors on the project, and roofer who responded, its a rock.How can wateralso filed a claim with Cincinnati Insurance.The hurt a rock?Regardless of that excellent question,insurance company initially agreed to defend Charles the general contractor and the roofer faced a claim forConstruction, but then ultimately sought and received damaging the museum and the dinosaur.Now imaginea court order finding it had no obligation to defend or that maybe, just maybe, there was some evidence thatcover the claim.That insurance dispute eventually the water damage did come from the roofers poormade it to the Ohio Supreme Court.work.The general contractor made a claim on its CGL policy for the roofers apparent faulty workmanship. To Cover or Not to Cover:That is the QuestionWould that claim be covered? The question before the Ohio Supreme Court was Probably, but it depends on where the claim was made. whether the general contractors CGL policy covered And whether the damage was accidental. the property damage caused by the subcontractors The trend in courts and modern insurance policiesfaulty workmanship.That is, are property damages across much of the country is to cover faultycaused by defective work an occurrence, which workmanship of subcontractors under CGL policies. would be covered under the insurance policy?Contractors should check their policies and speakCharles Constructions CGL policy, like most of those with their insurer to determine whether their policypolicies nationwide, covered claims that constitute an covers these claims.And subcontractors?Theyoccurrence. Occurrence simply means accident. might want to know whether the hiring contractorsThe general principle underlying CGL policies, the policy would cover the subcontractors (alleged) faultycourt noted, is that they are not intended to protect workmanship. business owners from ordinary business risks.An Ohio Bucks the Trend occurrence is an accident, the court concluded, and insurance is intended to cover accidents and the Recently, however, Ohio marched to its own drum andproperty damage caused by an accident.refused to follow that modern trend.In October 2018,For example, a collision between two automobiles is the Ohio Supreme Court found that a CGL policy does(presumably) an accident.The property damage to the not cover property damages resulting from any faultyautomobiles should be covered by insurance.workmanship, unless the policy specifically states otherwise.In making this ruling, that Court refused toBut that was not what happened at the inn.The court follow many other states courts which have reachedcited its own precedentthereby ignoring much of the the opposite position. rest of the countryand reasoned that the property That Ohio Supreme Court case, Ohio Northerndamage at issue, the structural damage that caused University v. Charles Construction Services, Cincinnatithe water leaks, was not an accident.That was faulty Insurance Co., et al, involved an inn constructedworkmanship, and under the plain language of the Charles Construction insurance policy, it was not an 12 www.mrca.orgMidwest Roofer"