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Construction Defect Not an Occurrence in Ohio

November 7, 2012 — CDJ Staff

The Ohio Supreme Court has concluded that claims of defective construction or workmanship are not an occurrence under a general liability policy. The court looked at appellate decisions and concluded that CGL policies are not intended to insure against risks under the control and management of the insured. These risks should instead be mitigated with performance bonds.

The question was raised in the case Westfield Ins. Co. v. Custom Agri Systems, Inc. The Sixth District Court of Ohio concluded it was an “open question under Ohio law whether a CGL policy covers defective construction claims.” Westfield filed a motion, granted by the Sixth Circuit, to certify the question to the state Supreme Court. The Sixth Court additionally found that the contractual liability exclusion barred coverage in the case, issues a summary judgment to Westfield.

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Construction Defect Not an Occurrence in Ohio