Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Hanover unit not obligated to cover builder on roofing project

Reprints
Hanover unit not obligated to cover builder on roofing project

A unit of The Hanover Insurance Group Inc. was not obligated to provide coverage to a construction firm being sued over work it had performed on condominium units because of a policy exclusion, says a federal appeals court, in upholding a lower court ruling.

Edgewood, Washington-based Chase Construction North West Inc. was sued by Lakewood, Washington-based Oakbrook Country Club Condominium Association over an alleged defective roofing project involving two buildings, according to Tuesday’s ruling in Chase Construction North West Inc. v. AIX Specialty Insurance Co. by the 9th U.S. Circuit Court of Appeals in San Francisco.

Windsor, Connecticut-based AIX Specialty, a Hanover unit, refused to provide Chase coverage based on a condominium exclusion in its commercial general liability policy. The exclusion excluded work performed in connection with condominiums except where “such work is being done under contract with the owner(s) of a single unit being worked on.”

Chase filed suit in U.S. District Court in Seattle, seeking a judgment that AIX had a duty to defend and indemnify it against the Oakbrook lawsuit.  The court granted AIX summary judgment dismissing the case, which a unanimous three-judge appeals court panel affirmed.

The district court correctly concluded the exclusion excludes from coverage damage arising out of roofing work performed by Chase on the two buildings, the ruling said. “We reject Chase’s argument that the term ‘unit’ can be read to mean a ‘single entity’ or ‘any group of things…regarded as an entity,’ ” it said.

“Moreover, we agree with the district court that the extremely broad interpretations offered by Chase would render the Condo Exclusion either nugatory or absurd,” said the ruling. “The policy exclusion is unambiguous and applies to exclude coverage on the claims raised in the Oakbrook litigation,” the ruling said, in upholding the lower court’s decision.

 

 

 

 

 

Read Next