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There has been a large increase in the amount of questions received recently by FC&S concerning the damage to property and damage to your work exclusions on the commercial general liability (CGL) coverage form. These exclusions come into play when an insured performs work on a customer’s property and that work is then judged to be faulty, causing the customer to make a claim for property damage against the insured. The exclusions are applied to prevent the CGL form from guaranteeing the work of the insured; that is, to prevent the CGL form from providing liability coverage for the insured for the costs of replacing and repairing defective materials or poor workmanship. Such damage is a business risk that the insured must bear himself.

However, the exclusions that would prevent coverage for damage to the insured’s work are written in such a way that insureds and claim adjusters alike often have problems understanding the correct application. The standard damage to property exclusions on the ISO CGL form read as follows:

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