The Texas Supreme Court’s ruled on Friday that pipe maker U.S. Metals isn’t covered under a commercial general liability (CGL) policy for the removal of defective parts in Exxon refinery equipment, but is
covered for the cost to replace insulation, pipe lining and gaskets that were destroyed during the replacement of its faulty flanges.
According to Allen Wolff, a shareholder in Anderson Kill PC's New York office:
"U.S. Metals can wield the Texas high court's finding that Liberty must cover it for the replacement of those components to argue for coverage for the cost to remove and replace additional components that were destroyed when the flanges were taken out."
"U.S. Metals is now in a position to say, 'Let's start going down the list of things that weren't our product' and assert to the insurance company that there is coverage for these other things as well, following the same logic articulated by the court."