Policyholder and Insurer Perspectives Navigating Occurrences, - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Construction Defect Insurance Claims: Policyholder and Insurer Perspectives Navigating Occurrences, Triggers, Business Risk and Other Exclusions, Priority of Coverage, and Contractual Risk Transfer TUESDAY, NOVEMBER 3, 2015 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Stephen S. Asay, Attorney, Pillsbury Winthrop Shaw Pittman , Washington, D.C. James P . Bobotek, Partner, Pillsbury Winthrop Shaw Pittman , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Construction Defect Insurance Claims James P. Bobotek and Stephen S. Asay Pillsbury Winthrop Shaw Pittman LLP

Insurance in a Typical Construction Defect Case Occupant Insurance Owner / Insurance Developer Design General Contractor Insurance Insurance Professionals Material Building Product Subcontractors Suppliers Manufacturers Insurance Insurance Insurance 6 | Construction Defect Insurance Claims

Analyzing Coverage for a Typical Construction Defect Claim  Is there an “occurrence”?  Is there bodily injury or property damage?  Did the injury or damage take place during the policy period?  Is coverage excluded?  Have you complied with all the policy conditions? 7 | Construction Defect Insurance Claims

Occurrence “Occurrence” means an accident , including continuous or repeated exposure to substantially the same general harmful conditions. 8 | Construction Defect Insurance Claims

Occurrence Is faulty workmanship an occurrence? 9 | Construction Defect Insurance Claims

IT IS!  Cypress Point Condo. Ass’n , Inc. v. Adria Towers LLC , 118 A.3d 1080 (N.J. Super. Ct. App. Div. 2015).  Essex Ins. Co. v. Sheppard & Sons Constr., Inc. , 2015 WL 4132919 (W.D. Okla. July 9, 2015).  Owners Ins. Co. v. Jim Carr Homebuilder, LLC , 157 So. 3d 148 (Ala. 2014).  Cherrington v. Erie Ins. Prop. & Cas. Co. , 745 S.E.2d 508 (W. Va. 2013).  Capstone Bldg. Corp. v. Am. Motorists Ins. Co. , 67 A.3d 961 (Conn. 2013).  I.J. White Corp. v. Columbia Cas. Co. , 964 N.Y.S.2d 21 (N.Y. App. Div. 2013).  K & L Homes, Inc. v. Am. Family Mut. Ins. Co. , 829 N.W.2d 724 (N.D. 2013). 10 | Construction Defect Insurance Claims

IT IS!  Scottsdale Ins. Co. v. R.I. Pools, Inc. , 710 F.3d 488 (2d Cir. 2013).  Crossmann Cmtys. of N.C., Inc. v. Harleysville Mut. Ins. Co ., 717 S.E.2d 589 (S.C. 2011).  Greystone Constr., Inc. v. Nat’l Fire & Marine Ins. Co. , 661 F.3d 1272 (10th Cir. 2011).  Am. Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co., Inc. , 707 S.E.2d 369 (Ga. 2011).  Sheehan Constr. Co., Inc. v. Cont’l Cas. Co. , 935 N.E.2d 160 (Ind. 2010).  Architex Assoc., Inc. v. Scottsdale Ins. Co., 27 So. 2d 1148 (Miss. 2010).  Fortney & Weygandt, Inc. v. Am. Mfrs. Mut. Ins. Co., 595 F.3d 308 (6th Cir. 2010). 11 | Construction Defect Insurance Claims

IT IS!  Liberty Mut. Ins. Co. v. Pella Corp. , 631 F. Supp. 2d 1125 (S.D. Iowa 2009).  Stanley Martin Cos., Inc. v. Ohio Cas. Group , 313 F. App'x 609 (4th Cir. 2009).  Martco Ltd. P'ship v. Wellons, Inc. , 588 F.3d 864 (5th Cir. 2009).  Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co. , 279 S.W.3d 650 (Tex. 2009).  Acadia Ins. Co. v. Peerless Ins. Co. , 679 F. Supp. 2d 229 (D. Mass. 2010).  U.S. Fire Ins. Co. v. J.S.U.B., Inc. , 979 So.2d 871 (Fla. 2007).  Lamar Homes, Inc. v. Mid-Continent Cas. Co. , 242 S.W.3d 1 (Tex. 2007). 12 | Construction Defect Insurance Claims

IT IS NOT!  Cizek Homes, Inc. v. Columbia Nat’l Ins. Co. , 853 N.W.2d 28 (Neb. Ct. App. 2014).  Zurich Am. Ins. Co. v. R.M. Shoemaker Co. , 519 F. App’x 90 (3d Cir. 2013).  Westfield Ins. Co. v. Custom Agri Sys. Inc. , 979 N.E.2d 269 (Ohio 2012)  Cincinnati Ins. Co. v. Motorists Mut. Ins. Co ., 306 S.W.3d 69 (Ky. 2011).  Group Builders, Inc. v. Admiral Ins. Co ., 231 P.3d 67 (Haw. Ct. App. 2010).  CMK Dev. Corp. v. West Bend Mut. Ins. Co., 917 N.E.2d 1155 (Ill. App. Ct. 2009).  Pursell Constr. Inc. v. Hawkeye-Security Ins. Co., 596 N.W.2d 67 (Iowa 1999); W.C. Stewart Constr., Inc. v. Cincinnati Ins. Co., 770 N.W.2d 850 (Iowa App. 2009). 13 | Construction Defect Insurance Claims

IT IS NOT!  Friel Luxury Home Constr., Inc. v. ProBuilders Specialty Ins. Co. RRG , 2009 WL 5227893 (D. Mass. Dec. 22, 2009).  Meridian Mut. Ins. Co. v. James Gilligan Builders , 2009 WL 1704474 (E.D. Pa. June 18, 2009).  Brake Landscaping & Lawncare, Inc. v. Hawkeye-Security Ins. Co. , 2009 WL 4725293 (E.D. Mo. Dec. 2, 2009). Pa. Nat’l Mut. Cas. Ins. Co. v. Parkshore Dev. Corp. , 2009 WL 1737032 (D.  N.J. June 17, 2009).  Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co ., 908 A.2d 888 (Pa. 2006). 14 | Construction Defect Insurance Claims

Legislative Attempts  Colorado: Revised Stat. § 13-200- 808 (2010) defines the term “accident” in a CGL policy to clarify that construction defects are covered losses unless the damage is intended and expected.  South Carolina: S.C. Code Ann. § 38-61-70 (2011) - CGL policies that insure a “construction professional” for liability arising from “construction related work . . . shall contain or be deemed to contain an “occurrence” definition that includes: (1) an accident, including continuous or repeated exposure to substantially the same general harmful conditions; and (2) property damage or bodily injury resulting from faulty workmanship, exclusive of the faulty workmanship itself.” 15 | Construction Defect Insurance Claims

Legislative Attempts  Hawaii: H.R.S. § 431:1-217 - For purposes of a liability insurance policy that covers occurrences of damage or injury during the policy period and that insures a construction professional for liability arising from construction- related work, the meaning of the term “occurrence” shall be construed in accordance with the law as it existed at the time that the insurance policy was issued.  Arkansas: A.C.A. §23-79-155 (2011) - A commercial general liability insurance policy offered for sale in this state shall contain a definition of “occurrence” that includes: (1) accidents, including continuous or repeated exposure to substantially the same general harmful conditions; and (2) property damage or bodily injury resulting from faulty workmanship. 16 | Construction Defect Insurance Claims

Texas — Maybe It Is?  Ewing Construction Co. Inc. v. Amerisure Ins. Co. , 420 S.W.3d 30 (Tex. 2014).  Gilbert Texas Construction LP v. Underwriters at Lloyd’s London , 327 S.W.3d 118 (Tex. 2010).  Lamar Homes v. Mid-Continent Cas. Co. , 242 S.W.3d 1 (Tex. 2007). 17 | Construction Defect Insurance Claims

Coverage A – Insuring Agreement We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. ISO Form CG 00 01 12 07 18 | Construction Defect Insurance Claims

“The Insured”  Named Insured — Declarations Page  Insured (Who Is An Insured Section)  Employees, officers, directors (acting in scope of employment)  Real estate managers  Newly formed/acquired organizations (grace period)  Additional Insureds  Joint Ventures 19 | Construction Defect Insurance Claims

“Bodily Injury” Means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. 20 | Construction Defect Insurance Claims