Groundbreaking AGA Victory establishes that Insurance Carriers
Cover Subcontractor’s Defective Workmanship

Posted on August 4th, 2016

Today Ansell Grimm & Aaron, P.C. (“AGA”) obtained not only a victory for their client, Cypress Point Condominium Association, but a clear victory for all condominium and homeowners associations in New Jersey. In a groundbreaking decision, the New Jersey Supreme Court (the “Court”) has confirmed that insurance policies held by developers and general contractors cover the faulty workmanship of subcontractors they hire. Specifically, the Court found that defective workmanship is an “occurrence” under commercial general liability policies, and that those policies specifically and unequivocally cover property damage caused by the faulty work of the subcontractors hired to actually perform the construction of the buildings.

AGA Community Association Group Partner Mark Wiechnik, appeared before the New Jersey Supreme Court in April 2016 to argue the case after the developer/general contractor’s insurers appealed a July 2015 decision by the New Jersey Appellate Division. At the Appellate level Wiechnik, and AGA Community Association Group Attorney Breanne DeRaps, successfully argued that, under a plain reading of the insurance policy in question, consequential damages to the common areas of the condominium complex and unit owners’ property caused by subcontractors’ defective work are “property damage” and an “occurrence” and that the trial court had erred in granting summary judgement in favor of the insurers.

This ruling gives New Jersey condominium associations and homeowners the means to recover damages from the sponsor, developer and/or general contractor, who typically have no assets to satisfy a judgment. For years, insurers have taken the position that exclusions in the policy for “your work” meant that the entire building, i.e. the “work” of the general contractor, was exempt from coverage. Carriers often refused to pay any damages even to associations and homeowners who were experiencing catastrophic leaks into their homes. That ends today.

If you have questions about the case, please contact Mark Weichnik at 609-228-5593 or mmw@ansellgrimm.com.

 

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 For more than 85 years, ANSELL GRIMM & AARON, PC has been dedicated to providing excellent legal representation. In providing zealous advocacy and skilled legal advice to our diverse clientele, our attorneys all practice with a common philosophy… commitment to excellence and commitment to people.