A majority of jurisdictions have found that defective or faulty
workmanship can constitute an "occurrence" under standard
form CGL insurance policies.
Imagine a situation in which a commercial tenant keeps valuable
inventory in a rented space, but because the property owner did not
properly maintain the roof of the building, unforeseen water
intrusion destroys the tenant's inventory. Is the landlord
covered under his standard form commercial general liability (CGL)
policy if that tenant sues for damages?
This issue—whether property damage caused by defective
construction work constitutes an accidental "occurrence"
under the insurance policy—has been frequently litigated in
recent years. The outcome of that coverage issue is largely
dependent on which state's substantive law applies.
