In two separate decisions handed down last month, the Third Circuit Court of Appeals re-affirmed that, under Pennsylvania law, claims against contractors for faulty workmanship do not.
The construction industry operates under the constant spectre of claims seeking damages for defective or faulty workmanship. Fortunately, the law in most states treats these claims as.
In
Berkley Specialty Ins. Co. v. Masterforce Constr. Corp., No. 4:19-CV-01162, 2021 U.S. Dist. LEXIS 14006 (M.D. Pa. Jan. 26, 2021) (Brann, J.), the Court recently concluded that, under Pennsylvania law, all reasonably foreseeable damages to third-party property caused by faulty workmanship do not constitute an “accident” sufficient to trigger coverage under a commercial general liability (“CGL”) insurance “occurrence” policy. The Court also emphasized that there could be no bad faith finding where the insurer has a “reasonable basis for denying benefits” under the policy or where coverage is “debatable.”
The underlying state court action arose after the homeowners contracted with a construction company to install a new standing seam metal roof. Although the company purported to be the contractor that would install the roof, it hired a subcontractor to install the roof and instructed him to conceal his identity as a subcontractor and represent himself as an emp