The underlying complaints for which the insureds sought a defense alleged defective products resulting in property loss, to property other than the insureds’ products, and personal injury, which sufficiently stated an occurrence as defined by the applicable policies. The insurer was obligated to defend the insureds because they set forth tort claims based on damages to persons or property of the homeowners, other than the insureds’ product.
The underlying suits against the insureds were based on strict liability, negligence, breach of warranty, and breach of contract as to windows and doors defectively designed or manufactured. The insureds alleged they were entitled to coverage under a commercial umbrella policy. Their claims stem from multiple out-of-state lawsuits filed by homeowners and property owners. The underlying lawsuits claimed that windows and doors were defectively designed or manufactured and resulted in water leakage that caused physical damage, such as mold and cracked walls, in addition to personal injury.
- “It is well established that an insurer’s duties under an insurance policy are triggered by the language of the complaint against the insured.”
- In determining whether an insurer’s duties are triggered, the factual allegations in the underlying complaint are taken as true and liberally construed in favor of the insured. “
- The duty to defend is broader than the duty to indemnify. If an insurer does not have a duty to defend, it does not have a duty to indemnify. However, “both duties flow from a determination that the complaint triggers coverage.”
- If a single claim in a multi-claim lawsuit is potentially covered, an insurer must defend against all claims until it is clear that the underlying plaintiff cannot recover on any claim.
- The risk intended to be insured [by commercial general liability policies] is the possibility that the goods, products or work of the insured, once relinquished and completed, will cause bodily injury or damage to property other than to the completed work itself and for which the insured is found liable.
- The policy at issue here includes in the definition of occurrence the subjective language “[a]s respects Bodily Injury or Property Damage, an accident, including continuous or repeated exposure to conditions, which results in Bodily Injury or Property Damage neither expected nor intended from the standpoint of the Insured.”
- Construing the policy in a manner that gives effect to all of its language, the insurance company is obligated to defend the insureds because their claims are based on damages to persons or property, other than the insureds’ products.