“Damage To Property” Exclusion Refers To Work Done “As To” Property, Not Physically On It

A federal district court held that the Damage to Property exclusion, one of the so-called “business risk” exclusions in a Commercial General Liability policy, does not preclude coverage for damage to a site when the work done by an insured is “directed towards” or “as to” property other than the site itself.
In Ohio Casualty Ins. Co. v. Wholesale Mulch Products, Inc., 2006 WL 87604 (N.D. Ill. January 10, 2006), the court found damage was covered by the liability policy of a company that caused harm to barges while unloading road salt from them. The exclusion had the standard wording: there is no coverage for property damage to “that particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it.” The court said the exclusion does not mean “located on,” but rather refers to property toward which work is directed, in this case the salt rather than the barges.

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Filed under Duty to Indemnify, Liability Policies

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