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Christopher Tellner, Kaufman Dolowich & Voluck

No matter how much lipstick claimants and policyholders put on claims arising from faulty workmanship, they still remain a nonoccurrence under CGL policies. Continuing into 2018, Pennsylvania state and federal courts have been expanding the Pennsylvania Supreme Court’s Kvaerner ruling in favor of finding no coverage for faulty workmanship claims under CGL policies of insurance. Courts have expanded their findings of no coverage to include not only the faulty workmanship but also damage to other property and work outside of that provided by the insured that was a reasonably foreseeable result. Recently, the U.S. Court of Appeals for the Third Circuit cemented this scope of coverage law to find that damages flowing from faulty workmanship were not an occurrence. Similarly, Pennsylvania courts are routinely rejecting bad faith claims when insurers deny coverage for faulty workmanship and related damages. Ultimately, insurers should issue all appropriate coverage determinations to the insured when claims of faulty workmanship are submitted from coverage and seek an immediate court declaratory judgment that defines the scope of coverage, if any, when warranted.

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