The United States District Court for the Middle District of Florida recently rendered a decision in Auto-Owners Insurance Company v. Elite Homes, Inc.[1] addressing the duty to defend when a “your work” exclusion exists in Commercial General Liability (CGL) policy. In Elite Homes, Joseph and Emily Crozier sued Elite Homes, Inc. (“Elite”) in state court for damages arising out of window leaks in their home. Elite tendered the defense of the claim to Auto-Owners Insurance Company (“AOIC”) seeking coverage for liability and damages. AOIC disclaimed coverage under the policy it issued to Elite (“Policy”) on the grounds that the window leaks only implicated issues with Elite’s scope of work; therefore, any claims were subject to the your work exclusion in the Policy. AOIC filed a declaratory judgment action in federal court, and moved for summary judgment on the issue of its duty to defend.
AOIC’s Motion relied on the Policy’s definition of “your work,” which excluded claims for damage to (1) work or operations performed by the insured or on its behalf; and (2) materials, parts, or equipment furnished in connection with such work or operations. The term “your work” also included (1) warranties or representations made at any time with respect to the fitness, quality, durability, performance, or use of “your work”; and (2) the providing of or failure to provide instructions. AOIC took the position that because Elite was the contractor who built the entire home, any damage to components of the home would constitute damage to its scope of work and would fall under the “Damage To Your Work.[2]” Continue reading