We have denied coverage for an ongoing litigation claim. Loss facts: our insured was general contractor and the house being built was new construction and near completion. Subcontractors were also working on the project (and in our opinion, they are the negligent party). A water loss ensued. There was no damage to personal property of the home buyer and the only damage was to our insured's work, that is, the entire house.

We have CG 22 94, exclusion—damage to work performed by subcontractors on your behalf, endorsed onto the CGL form.

Our coverage question being presented is: does an ALE claim generate coverage so as to allow us to continue to pay for the defense of the claim? We would still exclude any settlement/award with regards to the repairs to the home, but since the claimant was to move into the home and could not due to a delay with new repairs, an ALE claim was generated and paid for by his first party coverage homeowner carrier.