No Indemnification Under a CGL Policy for a Contractor’s Allegedly Defective Work

Exeter Building Corp. v. Scottsdale Insurance Co., 79 A.D.3d 927, 913 N.Y.S.2d 733 (N.Y. App. Div. 2010)

In this case, the plaintiff Exeter served as general contractor for a condominium development project.  The defendant insurance company Scottsdale issued several commercial general liability (CGL) policies that specifically excluded damage to property that arises out of faulty work.  The underlying action against Exeter alleged substantial defects in the work.  Scottsdale provided a law firm for Exeter’s defense but withdrew coverage on several claims when it learned of their nature.  Exeter then sued for a judgment ordering Scottsdale to defend and indemnify it.  The Appellate Division, Second Department, reversed the Supreme Court and granted Scottsdale’s motion for summary judgment, finding that CGL policies like this one are not intended to indemnify contractors against claims that their work is defective.

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