In the immortal words of Bob Dylan, the times they are a-changing. In the often placid world of insurance coverage, this change has been most evident with regard to the definition of the term “occurrence.” The meaning of this term is at the heart of coverage in standard commercial general liability (CGL) policies, and how the definition of occurrence is construed by the courts often determines whether coverage exists. This article will briefly review the traditional view of occurrence as it relates to coverage for faulty products or defective work, an emerging national trend, and recent developments in Pennsylvania.

The Traditional View

The traditional view is that defective products or defective work by the insured are not occurrences. In other words, the existence of a defect in a product or an event in which a defective product injures only itself does not constitute an occurrence. Cases exemplifying the traditional view include: Auto-Owners Insurance v. Rhodes, 748 S.E.2d 781, 790 (S.C. 2013); Westfield Insurance v. Custom Agri Systems, 979 N.E.2d 269, 273-74 (Ohio 2012); Cincinnati Insurance v. Motorists Mutual Insurance, 306 S.W.3d 69, 73-74 (Ky. 2010); Essex Insurance v. Holder, 372 Ark. 535, 539-40 (2008); L-J v. Bituminous Fire & Marine Insurance, 621 S.E.2d 33, 35-37 (S.C. 2005); United States Fidelity & Guaranty v. Advanced Roofing & Supply, 788 P.2d 1227, 1233-34 (Ariz. 1989); and National Union Fire Insurance v. Turner Construction, 986 N.Y.S.2d 74, 77 (N.Y. App. Div. 2014). As a result, the traditional view holds that an occurrence requires the defective work or product to cause bodily injury or property damage to property other than the product itself.