CGL Coverage for Glass Scratched by Contractors

The Big “I” Virtual University “Ask an Expert” service has received several questions regarding CGL coverage when a contractor scratches glass. One claim involved $100,000 in damage to windows of a high-value home.

The insureds have varied from window cleaners to painters to brick masons who were working directly on the window glass, the frame or surrounding areas. If the glass is inadvertently scratched, is there any CGL coverage?

These claims often are denied under the ISO CGL policy citing “care, custody or control.” First, note that the “CCC” exclusion in the ISO CGL applies only to personal property, not real property like building glass.

If an exclusion is correctly cited, it is most often either j.(5) or j.(6), which both apply to damage to “that particular part” of the property being worked on. The key word in both exclusions is “on.”

For j.(5), the exclusion applies to property “on which” operations are being performed. For j.(6), the exclusion applies to faulty workmanship “on” that part of the property.

In some cases, the exclusion is valid; in others, it is not. To examine eight claims scenarios that distinguish between what is and isn’t covered, click here.

HO Coverage for Glass Scratched by Contractors

An insured owned an expensive home with numerous custom windows. He hired a window washer with 25 years of experience to clean and wash the windows. While removing plaster and varnish from the windows, he scratched most of them. The insured subsequently learned that the window washer is uninsured. Does the insured have any coverage under his homeowners policy?

If such claims are denied, it is typically by reliance on one or more exclusions that include terms like “marring,” “scratching,” etc. However, a word in isolation may mean something entirely different from a word within the context of a list of exclusionary terms.

Without getting too academic, the legal terms ejusdem generi and noscitur a sociis might have bearing on whether or not there’s coverage for this type of loss. While the terms may sound a little esoteric, they can be invaluable in interpreting policy coverages involving claims as varied as hijacking and sexual assault.

For a complete discussion, click here.

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Building Codes: No Pain, No Gain

The Three Little Pigs learned a valuable lesson about building construction that we can all benefit from. Yet it seems to be human nature to put off doing the right thing until forced to by circumstances—usually bad circumstances. And when bad circumstances happen on a large scale, the government often intervenes and requires compliance with measures that in reality we should have been adhering to all along.

However, improving building codes and similar common-sense safety measures can be both costly and disruptive in the short term. But with the pain of complying with stronger building codes comes the gain of reduced losses to life and property in the future.

Industry studies show that post-Hurricane Andrew construction in Florida had 30% fewer claims than buildings built prior to the stronger codes. In addition, only 10% to 20% of post-Andrew homes saw claims, compared to more than 50% of homes built prior to Andrew. Another study estimated that approximately 60% of property losses during Hurricane Andrew were due to human error in poor design or installation methods.

Do most insurance policies cover the costs to comply with building codes after loss? No. Are there ways to insure this exposure by endorsement? Yes. To learn more about building codes and ordinance or law coverage, click here.

Bill Wilson (bill.wilson@iiaba.net) is Big “I” director of the Virtual University, an online learning center for agents and brokers.