Roof damage was not caused by an incident and therefore not covered by commercial general liability insurance, a federal appeals court held Thursday, affirming a lower court’s ruling in favor of a WR Berkley Corp. unit.
The dispute in Berkley Specialty Insurance Co., f/k/a/ Berkley Regional Specialty Insurance Co. v. Masterforce Construction Corp. was whether Lewisburg, Pennsylvania-based Masterforce was entitled to damages under its CGL policy with WR Berkley unit Berkley Specialty Insurance, as ruled by the 3rd US Circuit Court of Appeals in Philadelphia.
In the underlying litigation, the company was successfully sued in state court by a couple who alleged improper installation of ceiling panels, the ruling said. The court awarded the couple $223,000, according to court papers.
Berkley defended the company with a reservation of rights and then sued for a declaratory judgment. It had no obligation to continue to defend or indemnify Masterforce, according to the complaint in the case.
The U.S. District Court in Williamsport, Pennsylvania, ruled in favor of the insurance company and was affirmed by a three-judge court panel. The “improper execution of installing metal roof panels resulted in extensive damage to related components, such as the roof sheathing and wood blocking,”; the ruling said.
“As the district court stated, such damages were completely foreseeable. Accordingly, we agree with its conclusion that this injury is not covered by the applicable insurance,” the decision said, ruling that there was no occurrence under Masterforce’s CGL policies.
Attorneys in the case did not respond to requests for comment.