AGC Scores Victory, Seeks Two More

Risk management remains critical to the long-term success of all construction companies and the starting point for risk management continues to be insurance.  It is therefore important that AGC has persuaded the supreme court of yet another state to hold that the commercial general liability (CGL) policies sold to AGC members across the country do provide coverage for unexpected and unintended defects in their subcontractors’ (or sub-subcontractors’) workmanship, or at least the property damage resulting from such workmanship.  AGC of America and the Georgia Branch jointly scored this victory in the Georgia Supreme Court.   It follows similar victories in Florida, Indiana, Minnesota, Mississippi, Texas and, to a lesser extent, Arkansas. It also came shortly after AGC of America and the Carolinas AGC jointly filed a friend-of-the-court brief in a similar case in the Supreme Court of South Carolina.  And by days, it preceded a brief that AGC of America and the Texas Building Branch jointly filed in the U.S. Court of Appeals for the Fifth Circuit on the additional insured endorsements to these CGL policies.  The different question being presented to the Fifth Circuit is whether the latest of the standard forms of these endorsements provide general contractors and other additional insureds with coverage – and particularly defense costs – for third-party over actions. The name of the Georgia case is American Empire Surplus Lines Insurance Company v. Hathaway Development Company Inc. The name of the South Carolina case – which the Supreme Court of South Carolina has already agreed to rehear – is Crossman Communities of North Carolina v. Harleysville Mutual Insurance Company.  And the name of the Texas case is Gilbane Building Company v. Admiral Insurance Company. For additional information on any one or more of them, contact Mike Kennedy at AGC of America at 703-837-5335 or kennedym@agc.org.