In recent years, courts in several states have held that a general contractor's commercial general liability ("CGL") insurance policy may provide coverage for damage caused by a subcontractor's defective construction work. The Ohio Supreme Court is considering a case which may decide whether Ohio joins that trend.
CGL insurance generally protects insureds from risks that arise from losses resulting from chance or accident. One application of CGL insurance is for certain types of property damage resulting from an "occurrence".
Since 2012, Ohio has followed the rule that a CGL policy would not cover damage caused by a contractor to the contractor's own work. Westfield Ins. Co. v. Custom Agri. Sys., Inc., 133 Ohio St. 3d 476, 979, N.E.2d 269 (2012) ("Custom Agri."). The underlying rationale for the Custom Agri decision is that a contractor controls the way that it performs its own work. CGL insurance does not assure that a contractor will perform its own work correctly. If the contractor does not perform its own work correctly, that is an error within its own control, and therefore not an insurable event.
Now, the Ohio Supreme Court is considering whether a general contractor's CGL policy may provide coverage for damage caused by a subcontractor's defective work. The Ohio Supreme Court will decide whether to affirm or overturn Ohio Northern University v. Charles Construction Services, Inc., 77 N.E.3d 538...
