Editor's note: The following article contains information regarding CNA's insurance policies. CNA did not pay for nor request the information regarding its policies be provided. The recommendations made are that of the author alone.
Hundreds of court cases have addressed whether a claim against a roofing contractor alleging defective workmanship is covered by commercial general liability (CGL) insurance. Because CGL polices are triggered by an occurrence that is defined as an accident, many insurers have argued a lawsuit against a contractor based on defective workmanship is not covered by CGL insurance because defective workmanship is not considered an accident and, therefore, does not meet the occurrence requirement in CGL policies. Insurers also have sought to avoid coverage on the grounds that only claims alleging negligence are eligible for CGL insurance and claims based on an alleged breach of contract are not covered by CGL insurance.
Fortunately for contractors, the outcome of recent court cases indicates contractors have coverage for defective workmanship, bodily injury and/or property damage. Repair or replacement of insured contractors' work is not covered by CGL policies because they contain a "your work" exclusion. In other words, a roofing contractor's CGL policy will apply to a claim alleging defective workmanship as long as the claim includes some property damage other than the roof itself, such as damaged personal property inside the building or damage to other parts of the building, but will not apply to a claim seeking only replacement or repairs to the roof.
Errors and omissions insurance