08
Apr
2014

Pennsylvania Superior Court Opens Door to Coverage of Faulty Workmanship Claims

Mealy's Litigation Report

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PUBLISHED ON: April 8, 2014

This article originally appeared in Anderson Kill's Pennsylvania Alert (March 2014).

Pennsylvania policyholders can more confidently challenge insurance companies’ denials of faulty workmanship claims following the Pennsylvania Superior Court’s recent opinion in Indalex Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2013 Pa. Super 311 (Dec. 3, 2013). The Indalex decision reverses a nearly decade-long trend of Pennsylvania decisions narrowing the scope of insurance coverage for construction and defect-related claims under commercial general liability insurance policies. Equally important, the Indalex ruling dealt a blow to the insurance industry’s continual efforts to win overbroad expansion of the rulings in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., Millers Capital Ins. Co. v. Gambone Bros. Dev. Co., and Erie Ins. Exchange v. Abbott Furnace Co., which found that claims of faulty workmanship in some circumstances may not constitute coverage-triggering ‘‘occurrences.’’

Indalex, a manufacturer of windows and doors, was sued by contractors and property owners alleging that Indalex’s products were defective and resulted in water intrusion and leakage that caused physical damage, including the presence of mold and cracking in walls. Moreover, the underlying individual plaintiffs alleged that personal injuries also arose from these defects. The underlying complaints asserted claims of negligence, strict liability and breach of contract, as well as breach of warranty.