• Supreme Court of New Jersey Joins Growing Group of Jurisdictions Holding That Work of a Subcontractor That Causes Resultant Damage is Both an "Occurrence" and "Property Damage" under a Standard Form Commercial General Liability Policy
  • August 30, 2016 | Authors: Patrick J. Greene; Frank A. Hess
  • Law Firm: Peckar & Abramson A Professional Corporation - River Edge Office
  • In a recent signifi cant decision, the Supreme Court of New Jersey held that defective work of a subcontractor that causes consequential property damage is both an ¿occurrence¿ and ¿property damage¿ under the terms of a standard form commercial general liability (¿CGL¿) insurance policy. Cypress Point Condominium Assoc., Inc., v Adria Towers, L.L.C., 2016 N.J. Lexis 847 (Aug. 4, 2016). This decision is important in New Jersey and in other jurisdictions that had relied upon the infl uential New Jersey case, Weedo v. Stone¿E¿Brick, Inc., 81 N.J. 233 (1979), that had determined that such claims involved non-insured ¿business risks.¿ Despite the fact that standard insurance forms were amended after the Weedo decision to extend coverage for damages caused by the defective work of subcontractors, some courts and many insurers had continued to rely upon its ¿business risk¿ doctrine to deny defense and coverage. Such denials will be much more diffi cult after the Cypress Point decision, which specifically explains the Weedo decision and holds that it does not prevent coverage under the most common forms of CGL policies currently in use for damages caused by a subcontractor¿s defective work.