• Supreme Court of California Interprets "Under Construction" Exception to Vacancy Exclusion
  • January 8, 2007
  • Law Firm: Hinshaw & Culbertson LLP - San Francisco Office
  • TRB Investments, Inc. v. Fireman's Fund Insurance Co., 40 Cal. 4th 19, 145 P.3d 472 (2006)

    The Supreme Court of California recently held that the "under construction" exception to a policy's vacancy exclusion contemplated all building endeavors, not just new construction. In this case, the insured owners of a commercial building sued their insurer for breach of good faith and fair dealing and for breach of contract for denying a claim for water damage which occurred during the building’s renovation. In reversing the judgment of an appellate court, the Supreme Court held that the word "construction" contemplates all building endeavors, whether classified as new construction, renovations, or additions, all of which require the substantial and continuing presence of workers at the premises.