Georgia Supreme Court Addresses the Meaning of ‘Occurrence’ in a Standard Commercial General Liability Policy
Jul 24, 2013
On July 12, 2013, the Georgia Supreme Court responded to questions recently certified by the Eleventh Circuit Court in HDI-Gerling Am. Ins. Co. v. Morrison Homes, Inc., the underlying claim of which involved a California class action complaint by a group of homeowners against a builder, Morrison Homes.
The case centered around the meaning of the term “occurrence” as used in a standard commercial general liability (“CGL”) insurance policy. A policyholder’s potential liability for alleged property damage arising from faulty workmanship in residential construction was also at issue.
Subject to certain limits and exclusions, a standard CGL policy as developed by the Insurance Services Office (ISO) insures against a liability to pay damages for bodily injury or property damage caused by an “occurrence.”
In HDI, the Eleventh Circuit Court specifically asked:
- Whether, for an “occurrence” to exist under a standard CGL policy, Georgia law requires there to be damage to “other property,” that is, property other than the insured’s completed work itself; and
- If the answer to the first question is in the negative, whether, for an “occurrence” to exist under a standard CGL policy, Georgia law requires that the claims being defended not be for breach of contract, fraud, or breach of warranty from the failure to disclose material information?
The Georgia Supreme Court answered the first question in the negative, and the second question in the affirmative as to the question of fraud, but in the negative as to breach of warranty.
To read the Supreme Court’s entire order, click here.
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