To Err Is Human: Is Faulty Work an Insured Occurrence?
Since it was first introduced in 1940 as a means to protect insureds against business losses, the standard CGL policy has undergone numerous changes that have expanded the insuring agreement and narrowed the exclusions. Early versions of CGL had no coverage at all for “property damage to work performed by or on behalf of the named insured.” In 1976, however, the CGL form was changed to eliminate this exclusion for “work performed on behalf of the insured.” In 1986, coverage was expanded further to include the subcontractor’s exception, which provided coverage for damage to the contractor’s own work arising from the faulty workmanship of a subcontractor. The question whether a contractor's faulty workmanship can constitute a covered "occurrence" has been the subject of considerable litigation.
Article - June 17, 2013