Faulty workmanship exclusion, 8th Cir Mo

In BSI Constructors, Inc. v. Hartford Fire Ins. Co. BSI contracted to build a commercial building.  The roof was completed, and was damaged during the remaining construction.  As a result, a new roof had to be put on the building at a cost of $174,000.  BSI made a claim against Hartford on its Builder's Risk Policy.  Hartford declined to cover the cost of the new roof, citing the faulty workmanship exclusion, which states

2. We will not pay for "loss" caused by or resulting from any of the following:
. . . .
g. Defective, deficient or flawed workmanship or materials, or for expenses to redesign or revise flawed or defective plans or architectural designs.

But we will pay for "loss" to other Covered Property that results from such defective workmanship, materials or design provided such loss or damage is not otherwise excluded in this policy.

Summary judgment to Hartford was affirmed on appeal.  BSI argued that the faulty workmanship exclusion excluded coverage only for defects in the quality of the project as constructed, rather than excluding coverage for accidental damage to the project during construction. But the Eighth Circuit concluded that the faulty workmanship exclusion encompasses both a flawed product and a flawed process and thus applied to exclude coverage in this case.  There is a discussion of other case law on the issue.

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