Commercial general liability (CGL) policies are important policies on construction projects. They are policies of indemnity that would apply, subject to any exclusions in the policy, if a third-party asserts a claim for personal injury or property damage against you. But, because of the exclusions, if you are a third-party claimant looking to maximize insurance coverage to reimburse / pay you for your damages, it is important to consult with an attorney to best package and couch your claim to a CGL insurer.
CGL policies contain what are known as j(5) and j(6) exclusions that may apply when a construction defect claim is asserted for defects and damage discovered and occurring during construction (versus a latent defect discovered post-construction / post-completion).
The j(5) and j(6) exclusions exclude damage to:
j(5) That particular part of real property on which you…are performing operations, if the property damage arises out of those operations; or
j(6) That particular part of any property that must be restored, repaired or replaced because your work was incorrectly performed on it.
As an example of how these exclusions may apply, say during construction a painter spatters paint on windows. The painter tries to remove the paint from the windows but damages the windows in the process. A claim is asserted against the painter for the window damage. Because the natural scope of the painter’s work may include cleaning paint spatter during the painter’s painting operations, the j(5) exclusion may apply to bar coverage. Consequently, any repairs or replacement to the windows damaged during the cleaning of the spatter was the result of the painter’s incorrect scope of work, thus the j(6) exclusion may apply to bar coverage.
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