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In this case, the insurer owed no duty to defend the insured under not one but two separate exclusions. The habitual new construction exclusion mirrors the typical "your products" and "your work" exclusions in traditional CGL policies, including the ISO policy. (Credit: VCNW/Shutterstock.com) In this case, the insurer owed no duty to defend the insured under not one but two separate exclusions. The habitual new construction exclusion mirrors the typical “your products” and “your work” exclusions in traditional CGL policies, including the ISO policy. (Credit: VCNW/Shutterstock.com)

Upholding a lower court’s decision, a federal appeals court ruled an insurer is not obligated to defend a land developer charged with negligent design and construction under exclusions in its policies.

Western Heritage Insurance Company (Western) provided commercial general liability insurance coverage to HT Services, LLC, a land developer in Colorado Springs, Colo. The covered property included four acres of land on which a residential community stood. In 2016, the development’s homeowners’ association sued HT Services, among others, for construction defects relating to a retaining wall, asserting that they were caused by the negligent conduct of the developer. Western denied coverage and refused to defend.

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