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Ensuing Losses From Faulty Workmanship Must be Covered

May 10, 2012 — Tred Eyerly, Insurance Law Hawaii

Coverage for damages resulting from faulty workmanship in the construction of an apartment complex was at issue in The Bartram, LLC v. Landmark Am. Ins. Co., 2012 U.S. Dist. LEXIS 44535 (N.D. Fla. March 30, 2012).

The owner of the apartments, Bartram, had primary coverage and three layers of excess coverage. Each contract excluded loss from faulty workmanship. The policies provided, however, "if loss or damage by a Covered Cause of Loss results, we will pay for that resulting loss or damage."

Bartram contended water intrusion occurred because of faulty workmanship, which caused damage to the buildings’ exterior and interior finishes, wood sheathing, framing, balcony systems, drywall ceilings and stucco walls. This damage was separate from the work needed to simply fix the faulty workmanship. Therefore, Bartram argued, the ensuing losses that resulted from the water intrusion was covered.

The insurer argued the ensuing loss exception was not applicable if the ensuing loss was directly related to the original excluded loss.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at

Ensuing Losses From Faulty Workmanship Must be Covered