The Ohio Supreme Court’s October 9, 2018 decision in Ohio Northern University v. Charles Construction Services, Inc., 2018-Ohio-4057 issued a blow to general contractors attempting to obtain insurance coverage under their commercial general liability (CGL) policies for property damage caused by their subcontractor’s faulty work. The Ohio Supreme Court held that faulty work is not “accidental” or “fortuitous,” as contemplated within the policy’s definition of an “occurrence,” and found that the general contractor had no coverage under its CGL policy.

Ohio Northern University (University) sued the general contractor, Charles Construction Services, Inc. (CCS) arising out of a contract to build a luxury hotel and conference center (Project) on the University’s campus. After completion of the Project, the University discovered extensive water damage from hidden leaks and other serious structural defects that it believed were caused by the defective work of CCS and its subcontractors. In response to the University filing suit, CCS sought coverage under its CGL policy, relying on the products/completed operations (PCO) coverage available for claims involving property damage caused by the faulty work of a subcontractor.

Continue Reading Contractors Beware – Ohio Joins Minority of States in Insurance Coverage Row

Recent Pennsylvania court decisions have virtually eliminated any insurance coverage under commercial general liability policies for claims brought against general contractors arising from the faulty workmanship of their subcontractors.

Construction Executive.pngJonathan A. Cass, partner with Cohen Seglias Pallas Greenhall & Furman, PC, recently co-authored an article with Peter Stoll, Jr. and Mary Stoll Walter of The Stoll Agency, Inc. for the December 2010 issue of Construction Executive magazine, titled “Protecting Against Faulty Workmanship Claims” which dealt with this topic. The article discusses how courts in certain states have eliminated insurance coverage for claims arising from the faulty workmanship of subcontractors, and explains how general contractors can use, as an alternative to insurance coverage, performance and maintenance bonds to provide protection against such faulty workmanship claims.

To read the full article, please visit Construction Executive, and for more information please contact Jonathan Cass.