In a July 23, 2014 opinion, the South Carolina Court of Appeals held that the “your work” exclusion in a CGL policy issued to a subcontractor will not provide coverage for defective work, including the removal and reconstruction of the work of other contractors caused by the defect. In Precision Walls, Inc. v. Liberty Mutual Fire Insurance Co. (S.C. Ct. App. July 23, 2014), Precision Walls, Inc. was hired by SYS Constructors, Inc. to perform steel framing, construction of roof trusses and provide “taped and sealed blue board insulation.” The tape on the joints of the blue board insulation installed by Precision lost adhesion requiring removal of the exterior brick veneer wall to repair the joints. Precision contended that the Liberty Mutual policy should provide coverage for the cost of tearing down and rebuilding the brick never, since that was not the work of Precision. The court found that the loss resulted from Precision’s non-conforming work and that the “your work” exclusion in the CGL policy did not provide coverage for any of the repair costs.
CGL policies do not provide coverage for defective workmanship. It is therefore, imperative to assure that the work of contractors and subcontractors is observed frequently by qualified individuals and that all contractors and subcontractors you select have adequate means to pay for correction of defective work.