Every Texas construction defect case involving subcontractors now potentially covered Insurers should expect more contract-based claims for defense as a result of a recent Texas Supreme Court ruling that may make every construction defect case involving subcontractors covered, even if limited to breach of contract or express warranty theories, so long as the damage was not expected or intended. We believe this pro-insured conclusion will have a significant impact upon insurance coverage evaluations generally in Texas. As with many decisions, the concern is not so much the result in this case, but the broad language used by the Court which will be used by insureds in attempts to more broadly interpret the CGL policy. An economic effect of the ruling in Lamar Homes, Inc. v. Mid-Continent Casualty Co., No. 05-0832 (August 31, 2007), which we expect to soon be made final, may be a significant increase in the cost of CGL insurance in Texas, especially for general contractors, home builders, and others who employ subcontractors. Texas a liberal state? At least as to these insurance … Continue reading →
