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Page 484 DEFENSE COUNSEL JOURNAL–October 2012Minnesota: Bor-Son Bldg. Corp. v.Employers Commercial Union Ins. Co.,323 N.W.2d 58 (Minn. 1982).Occurrence? No, in concept. Ageneral liability policy is intended tocover tort risks, not contractual riskswhich are within the insured’scontrol. However, damage toproperty other than the insured’swork is caused by an “occurrence”and therefore covered. 39Insured’s work covered? No.Mississippi: Architex Ass’n., Inc. v.Scottsdale Ins. Co., 27 So.3d 1148 (Miss.2010).Occurrence? Yes, in certaininstances. The court distinguishedbetween intentional and negligentacts by the insured and itssubcontractors, holding that thequestion of whether the damage wasaccidental from the standpoint of theinsured will govern the question ofwhether there was an “occurrence.”Insured’s work covered? Possibly. Ifthe insured negligently performed itswork, then presumably the damage tothe insured’s work would be covered.Work performed by a subcontractorwould presumably be covered sincethe damage would not be intended orexpected from the standpoint of theinsured.39 See Integrity Mutual Ins. Co. v. Klampe,A08-0443, 2008 WL 5335690 (Minn. Ct. App.Dec. 23, 2008).Missouri: Hawkeye-Security Ins. Co. v.Davis, 6 S.W.3d 419 (Mo. Ct. App.1999).Occurrence? No. A builder’s breachof contract and warranty is inherentlynot an accident and therefore not an“occurrence.”Insured’s work covered? No.Montana: Story v. Hawkeye-SecurityIns. Co., No. DV-99-38, 2001 WL35735573 (Mont. Ct. App. May 24,2001).Occurrence? Yes, implicitly. Thecourt simply applied the business riskexclusions as being unambiguous tonegate coverage for constructiondefects, even where the work wasperformed by a subcontractor.Insured’s work covered? No. Thebusiness risk exclusions clearly barcoverage for any damage to theinsured’s work or arising out thatwork.Nebraska: Auto-Owners Ins. Co. v.Home Pride Co’s, Inc., 684 N.W.2d 571(Neb. 2004).Occurrence? No. Faultyworkmanship, standing alone, is notan “occurrence” because the elementof fortuity is lacking. However,faulty workmanship which causes anaccident is an “occurrence.”Insured’s work covered? No.However, damage to property otherthan the insured’s work is covered.
Raising the Roof Page 485Nevada: United States Fidelity &Guaranty Co. v. Nevada Cement Co., 561P.2d 1335 (Nev. 1977).Occurrence? Yes. While the courtdid not directly address the issue, itsconclusion is implicit in its holdingthat the “your product” exclusions donot otherwise bar coverage.Insured’s work covered? Yes.Where the insured’s defectiveproduct is incorporated into anotherstructure and weakens that structure,property damage has occurred, whichis covered by a general liabilitypolicy.New Hampshire: High CountryAssociates v. New Hampshire Ins. Co.,648 A.2d 474 (N.H. 1994).Occurrence? Yes. The court foundthe term “occurrence” to beambiguous and therefore interpretedit to encompass events which werenot expected or intended by theinsured.Insured’s work covered? Possibly.The court distinguished between an“occurrence of negligentconstruction” and “negligentconstruction which causes anoccurrence.” This ethereal languagepresumably distinguishes betweencoverage for the insured’s work(occurrence of negligentconstruction) and damage to otherproperty (negligent constructionwhich causes an occurrence). Thecourt did not consider the businessrisk exclusions because they were notconsidered by the trial court.New Jersey: Firemen’s Insurance Co. ofNewark v. Nat’l Union Fire Ins. Co., 904A.2d 754 (N.J. 2006). 40Occurrence? No. The court followedthe Weedo v. Stone-E-Brick logic thatmere defective work, standing alone,is not an “occurrence.” However,damage to other property can becovered as an “occurrence.” 41 Thecourt applied the familiar distinctionbetween sub-standard work whichmust be removed and replaced (notan “occurrence”) and sub-standardwork which results in accidentaldamage to other property (an“occurrence”), which came from theWeedo opinion.Insured’s work covered? No.New Mexico: Undecided.New York: Pavarini Construction Co. v.Continental Insurance Co., 759 N.Y.S.2d56 (N.Y. App. Div. 2003); George A.Fuller Co. v. U.S. Fid. & Guaranty Co.,613 N.Y.S.2d 152 (N.Y. App. Div. 1994).Occurrence? No. Defectiveconstruction which results only indamage to the insured’s workproduct lacks the element of fortuitynecessary to constitute an“occurrence.” However, defectivework which results in consequential40 See also Pennsylvania Nat’l Mutual Ins. Co.v. Parkshore Development, Inc., 403 Fed.Appx. 770 (3d Cir. 2010).41 405 A.2d 788 (N.J. 1979).
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