NJ Court Rejects Coverage-Minimizing Application Of Non-Cumulation Clauses In Construction Defect Cases

A recent New Jersey trial court decision confirmed expansive coverage for commercial general liability policyholders entrenched in construction defect litigation involving continuous and progressive property damage.

New Jersey applies the “continuous trigger” method to insurance coverage claims involving progressive and indivisible injuries, as discussed in our treatise, Policyholder’s Guide to the Law of Insurance Coverage (see § 3.02[B][2]). Under this doctrine, insurance coverage is triggered in each insurance policy year from initial exposure to the injury’s manifestation. Originally stemming from asbestos exposure claims, this doctrine was later extended to environmental contamination claims, and ultimately constructive defect cases. New Jersey courts recognized that the public policies implicated by the progressive nature of asbestos exposure were likewise germane to construction defect matters, where property damage can be latent, undetected, and gradually worsening over time.