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Unexpected Faulty Workmanship is Covered

In Sheehan Construction Co. v. Continental Insurance Co., ___ N.E. 2d ___ (Ind. 2010), the Indiana Supreme Court joined those jurisdictions that have found faulty workmanship can be an accident so long as the resulting damage is an event that occurs without expectation or foresight.  The Court recognized that whether an event occurs with a “lack of intentionality” depends on the facts of each case.  It also noted that the CGL insurers, as of 1986, carved out from the “your work exclusion” an exception for work done by subcontractors.  If the initial grant of coverage for accidents did not cover faulty workmanship, there would be no reason for the “your work exclusion.”The facts in this case were typical.  Plaintiffs filed a class action alleging that after experiencing water leaks in their homes, they experienced leaking windows, fungus growth on the siding, decayed OSB sheathing, deteriorating and decaying floor joists, and water damage to the interior of the home including water stained carpeting.  Sheehan Construction Company was the general contractor on the project and was responsible for hiring subcontractors who actually built the houses.  The plaintiffs alleged that these problems were caused by the faulty workmanship of Sheehan’s subcontractors which included lack of adequate flashing and quality caulking around the windows, lack of a weather resistant barrier behind the brick veneer to protect the wood components of the wall, improperly installed roofing shingles, improperly flashed or sealed openings for the chimney and vents, and inadequate ventilation in the crawl space.

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