(Editor's Note: This article has been contributed by Henry C. Spalding, III, principal at Sands Anderson. Spalding's areas of practice include construction law, coverage and casualty litigation, employment law and risk management.)

In my law practice, I am frequently called upon, at different times, to represent both builders and their insurance carriers in construction defect lawsuits. Whether such claims are covered under a commercial general liability (CGL) policy raises a number of complicated questions. This article will focus on some of the more common coverage questions.

Let's consider the following scenario. ABC Builder contracts with Harry and Sally Homeowner to build a single-family house. ABC does all of the work, with the exception of subbing out the brick masonry work to a subcontractor. Two years after closing, the Homeowners discover evidence of extensive water and moisture intrusion. Forensic engineers conclude that the water intrusion is the result of improper flashing and a lack of weep holes on the home's brick veneer. In addition, water is coming into the house through the roof because of numerous problems with its installation. The water intrusion has caused damage throughout the house, including damage to hardwood flooring, widespread mold and a ceiling which has collapsed.