Illinois Supreme Court Issues Landmark Construction Insurance Coverage Ruling

In a landmark decision, the Illinois Supreme Court has granted a major victory for policyholders seeking general liability insurance coverage for construction defect and faulty workmanship claims. For years, Illinois' intermediate appellate courts rewrote general liability policies to eviscerate coverage for owners, developers, builders, general contractors, and subcontractors facing construction defect or faulty workmanship claims because those courts would only find the “property damage” or “occurrence” needed to trigger general liability policies if the damage went beyond the scope of the project. The Illinois Supreme Court had not touched the issue until last week. In a victory for insureds and common sense, the court has now eliminated the “scope of work” rule.