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Roof damage not occurrence under Berkley policy


Roof damage was not caused by an occurrence and therefore is not covered under a commercial general liability insurance policy, a federal appeals court held Thursday, in affirming a lower court’s ruling in a W.R. Berkley Corp. unit’s favor.

The dispute in Berkley Specialty Insurance Co., f/k/a/ Berkley Regional Specialty Insurance Co. v. Masterforce Construction Corp. was whether Lewisburg, Pennsylvania-based Masterforce was entitled to indemnification under its CGL policy with W.R. Berkley unit Berkley Specialty Insurance, according to the ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia.

In the underlying litigation, the company was successfully sued in state court by a couple alleging faulty roof panel installation, the ruling said. The court awarded the couple $223,000, according to court papers.

Berkley defended the company subject to a reservation of rights, then filed suit seeking a declaratory judgment it had no duty to continue to defend or indemnify Masterforce, according to the complaint in the case.

The U.S. District Court in Williamsport, Pennsylvania, ruled in the insurer’s favor and was affirmed by a three-judge appeals court panel. The “faulty workmanship installing metal roof panels resulted in extensive damage to related components, such as the roof sheathing and the wood blocking,” the ruling said.

“As the District Court observed, such damages were entirely foreseeable. Accordingly, we agree with its ultimate conclusion that this damage is not covered under the applicable insurance policy,” the decision said, in ruling there was no occurrence under Masterforce’s CGL policies.

Attorneys in the case had no comment or did not respond to a request for comment.