Article Date: 01/31/2014

State Supreme Court: CGL Policy’s Contractual Liability Exclusion Does Not Apply to Ordinary Breach-of-Contract Claims for Defective Construction Work

By Scott Turner


A state supreme court has ruled that the standard commercial general liability (CGL) policy Contractual Liability Exclusion does not apply to bar ordinary breach-of-contract claims over a policyholder’s defective construction work.
The ConstructionPro Week summary of this case is available to ConstructionPro Network members and includes:

  • The citation for the case
  • The details of the case
  • Author’s commentary
  • A link to the complete PDF copy of the original opinion

Here is a portion of the author's commentary:


"One hopes that this unanimous decision in Texas will, as a practical matter, send a strong message and foreclose the insurance companies from making these same, dubious arguments in other states, both to policyholders in response to tended claims and to the courts there.


"The application of the exclusion in the Gilbert case landed in a gray area. It is entirely reasonable and arguable in jurisdictions other than Texas that the exclusion only applies to the assumption of another’s liability and does not apply to eliminate coverage when there is an expansion of the policyholder’s own duty of care and the resultant liability that stems from it."



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