'Particular Part' Exclusions Can Mean Trouble for Contractors

Law 360

PUBLISHED ON: March 2, 2020

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Commercial general liability insurance policies are meant to provide broad coverage against liability for, among other things, property damage or bodily injuries resulting from accidents.

These policies typically contain certain standard-form property damage exclusions, referred to as business risk exclusions, the purported purpose of which is to exclude coverage for the costs to repair or replace a policyholder’s faulty or defective work, or other supposedly foreseeable risks of doing business which the policyholder theoretically should be able to control.

These business risk exclusions include “that particular part” exclusions, exclusions J(5) and J(6) in standard-form CGL policies, which purport to set the boundaries of damages excluded as a result of “your work.” Understanding the scope and application of these exclusions is critical to understanding what will and will not be covered under any particular CGL policy.

This article discusses the two competing interpretations of “that particular part,” of which a policyholder in the construction industry should be mindful when assessing the adequacy of CGL coverage that contains these standard-form exclusions....