Your Own Work: Are You Covered by a Comprehensive General Liability Policy?
In a recent case, Westfield Insurance Company v. Sheehan Construction Company, Inc., et al., the Seventh Circuit provided a good direction and reminders concerning the “own work exclusion.” In your Comprehensive General Liability Policy, there is a typical exclusion that excludes coverage for “your work.” Until 1986, “your work” exemption typically would cover your work as well as your subcontractor’s work. In 1986 the standard ISO form changed by adding that “This exclusion does not apply to damage work or the work out of which the damage arises was performed on your behalf by a subcontractor.”
However, not every policy has that particular language. It is important for general contractors to review their insurance policy to determine whether they have coverage for work done by their subcontractors or not. The above referenced case had language that stated that the “own work” exclusion applied to work or operation performed “work or operation performed by you or on your behalf.” This particular language allowed the insurance company to deny coverage for the subcontractors’ work despite the 1986 change. Therefore, it is important for you to look closely at your policies to determine if you have coverage for your own work or have coverage for the work of your subcontractors.