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Between 2004 and 2008, there was a scarcity of building supplies in the wake of a national housing boom and several hurricanes devastating eastern and southern coasts of the United States. Desperate for solutions, some builders began using drywall imported from China to build and repair. That imported drywall has been linked to property damage in the homes, such as corrosion of metal surfaces, as well as claimed health issues. Thus began the onslaught of third-party liability claims by homeowners against builders and drywall subcontractors, as well as others involved in the supply chain, and, in turn, commercial general liability (CGL) coverage claims by these builders and subcontractors.

Of course, the damages various parties have sought to recoup have been significant, as the expense of identifying, tearing out, and replacing drywall, coupled with repairing other property damage, has been substantial. Complicating the job of claims adjusters across the country is the fact that courts have remained largely divided in their interpretations of policy language and exclusions in such cases.

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