The Connecticut Supreme Court, in a Case of First Impression, Holds Negligent Construction Insured Under General Liability Policy

McCarter & English, LLP

In Capstone Building Corp. v. American Motorists Insurance Co., 67 A.3d 961 (Conn. 2013), the Supreme Court of Connecticut held, in a case of first impression, that commercial general liability insurance policies may cover allegations that a subcontractor’s unintended defective construction work damaged non-defective property. The court’s opinion joined a growing number of decisions holding negligent construction is insured under general liability policies, and added more counterweight to decisions, such as Kvaerner, which was and remains the bulwark of the insurance industry’s attempt to avoid coverage for such claims.

In Capstone, Capstone Building Corporation and Capstone Development Corporation (collectively, “Capstone”) served as the general contractor and project developer for construction at the University of Connecticut (“U. Conn.”), which purchased a commercial general liability insurance policy from a predecessor of American Motorists Insurance Company (“AMICO”). Id. at 968. Capstone sought coverage from AMICO as an additional insured when U. Conn. alleged construction defects, but AMICO denied coverage on the ground that the policy did not cover alleged defects arising from Capstone’s own work. Id. at 971.

Originally published in LexisNexis, 2013 Emerging Issues 7063 on 9/17/2013.

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