- Georgia Supreme Court Holds “Occurrence” Does Not Require Damage to Property Other Than Insured’s Under CGL Policy
- September 27, 2013 | Author: George B. Hall
- Law Firm: Phelps Dunbar LLP - New Orleans Office
The Georgia Supreme Court recently held that an insured’s faulty workmanship can result in an “occurrence” under a standard CGL policy even when the only property damage alleged is to the work performed by the insured. Taylor Morrison Servs. Inc. v. HDI-Gerling Am. Ins. Co., 746 S.E.2d 587 (Ga. 2013).
The insured was sued for negligent construction by homeowners who sought to represent a class of homeowners owning homes built by the insured. After initially defending the insured, the insurer sought a declaratory judgment that it had no obligation to defend or indemnify because there was no “occurrence.” The insurer argued that the only property damage alleged was to the work of the insured, i.e., the homes constructed by the insured. A federal court granted summary judgment to the insurer, finding that there was no “occurrence.” The insured appealed. On appeal, the U.S. Eleventh Circuit Court of Appeals certified to the Georgia Supreme Court the question of whether Georgia law requires damage to property other than the insured’s completed work for an “occurrence” to exist under a CGL policy.
The Georgia Supreme Court held that an “occurrence” does not require damage to the property or work of someone other than the insured. The Supreme Court reasoned that, because the definition of “occurrence” in the policy includes the term “accident,” an undefined term, under the rules of construction, the commonly accepted meaning of “accident” controls. After determining the commonly accepted meaning of “accident” to be “an unexpected happening without intention or design,” the Georgia Supreme Court concluded that an “occurrence” can exist simply where faulty workmanship causes unforeseen or unexpected damage to property.