Construction Defects Do Not Trigger a CGL Policy in Hawaii

August 5, 2013

The Hawaii District Court has ruled that construction defects do not trigger a commercial general liability. Hillary Coombs Jarvis and John P. Swenson of Steptoe & Johnson LLP have written a discussion of the court’s decision, where they note that the court found that “substandard construction work was a foreseeable breach of contract.”

After 3Builders was sued over leaks in replacement roofs, their insurer, Nautilus, sought “a judicial determination that it had no duty to defend or indemnify 3Builders in either the state court lawsuit or the arbitration.” The court concurred, holding that “the relevant analysis was whether the origin of the underlying claims, including those sounding in tort, were premised on a contractual relationship or based on an independent tort claim under state law.” And this is what the court found, that “all claims in the building owners lawsuit and Project manager’s arbitration arose from the Project contract or from the contractual relationship.”


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