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ARTICLE · 13 DECEMBER 2023

Illinois Supreme Court Changes Law For Construction Defect Coverage

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The Illinois Supreme Court opened the door for commercial general liability (CGL) policies to potentially cover construction defect cases...

United StatesReal Estate and Construction
Kenneth Gorenberg
Kenneth Gorenberg
Kelly K. Koss
Kelly K. Koss
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Highlights

The Illinois Supreme Court opened the door for commercial general liability (CGL) policies to potentially cover construction defect cases

The court held CGL policies can provide coverage in Illinois for damage caused by inadvertent construction defects

This decision reverses a previous tendency among Illinois courts to find no coverage for faulty workmanship either because it is inherently not accidental or because there was no damage beyond the insured defendant's scope of work

The Illinois Supreme Court has opened the door for commercial general liability (CGL) insurance policies to cover construction defect cases. Overturning years of lower court cases, the court held that CGL policies can provide coverage for damage caused by inadvertent construction defects. Faulty workmanship qualifies as an accidental "occurrence" and that actual damage, even within the insured's scope of work, is insurable "property damage."

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