Connecticut Supreme Court Rules That Defective Construction Work Can Be An “Occurrence” Under a CGL Policy

June 7, 2013

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On an issue of first impression, the Connecticut Supreme Court found in Capstone Building Corp. v. American Motorists Ins. Co., S.C. 18886, 2013 Conn. LEXIS 187 (June 11, 2013), that unintended construction defects may form the basis of an “occurrence” or “accident’” under commercial general liability policies.  The Court also found that damage to an insured’s nondefective work is “property damage” within a policy’s initial grant of coverage.  Claims limited to damages for the replacement of defective components or poor workmanship, however, do not constitute “property damage” under the policy.  

Capstone Building Corp. and Capstone Development Corp. (together, “Capstone”) sued their insurer, American Motorists Insurance Company (“AMIC”) seeking coverage for damages to buildings they constructed.  Capstone Building and Capstone Development served, respectively, as the general contractor and the project developer for construction of a student housing complex at the University of Connecticut (“UConn”). UConn procured a commercial general liability policy through AMIC for the Hilltop project, which insured Capstone and their work... read more