The Eleventh Circuit has reversed an insurer's award of judgment after finding that uncertainty about when the alleged damage occurred within the scope of the "Your Work" exclusion. More specifically, the court found unclear whether the damage occurred before or after the contractor abandoned the job, thereby triggering an exception to the "Your Work" exclusion for damage to work that had not been completed or abandoned. timing can be a critical factor when it comes to triggering coverage for work and completed operations.
In Southern-Owners Insurance Company v. MAC Contractors of Florida, LLC a pair of trustees hired MAC Contractors ( doing business as KJIMS Construction) to serve as the general contractor for a custom residence. After construction started, dispute between the trustees and KJIMS caused the contractor to abandon the job before completing the project. The trustees followed with a lawsuit alleging, among other things, that KJIMS had damaged wood floors and a metal roof, which KJIMS had promised to remediate but never did
KJIMS's general liability insurer, Southern-Owners, initially agreed to defend the lawsuit, but later with his defense of the policy's "Your Work" exclusion. The insurer sought a declaration that the policy “Your Work” excluded barred coverage because of the alleged property damage arose out of KJIMS's abandoned work. According to its terms, the "Your Work" exclusion bars coverage for "damage to your work arising out of it or any part of it and included in the products-completed operations hazard." your property is damaged and property damage is occurring. . . [w] ork that has not been completed or abandoned. ”
On summary judgment, the district court agreed with the insurer and think that the exclusion barred coverage for property damage once the insured abandoned the project on which it was working. But on appeal, the Eleventh Circuit reversed. The panel reasoned that the exclusion does not cover property damage that occurs before and insured's work has been abandoned. The court then alleged that allegedly KJIMS abandoned its work, the complaint did not clearly when the property damage occurred and could be reasonably constructed to alleviate the damage occurred before KJIMS abandoned the work. As a result, the Eleventh Circuit think that the exclusion did not clearly cover, thus, the insurer had a duty to defend.
. However, factual ambiguities in the claim may also result in a sufficient uncertainty to trigger an insurer's duty to defend, even against unambiguous policy language, since the insurer must defend if there is a potential for coverage. The timing of critical events is one area that is especially susceptible to factual uncertainty. Insureds should therefore pay close attention to the alleged timing of such events and be ready to hold their insurers to their broad duty to defend.