| In Cincinnati Insurance Co v. Taylor-Morely Inc., the Court considered the applicability of a Commercial General Liability Policy. In this case, the defendant, a real estate developer, promised the homeowners that he would build their homes around a championship golf course. Defendant breached this promise and the homeowners’ homes were replete with defects, including defective electrical outlets, improper wallboard and fireplaces, cracks and water leaks in the basements.
The Court held that in order for coverage under a Commercial General Liability Policy to apply to a homeowner’s claim against its real estate developer, there must be an “occurrence.” An “occurrence” is defined as an “accident,” or a non-expected, non-intended injury. This definition can include continuous or repeated exposure to conditions, which results in bodily injury or property damage. The natural and ordinary consequences of an act do not constitute an accident.
The Court found that shoddy workmanship and construction defects are not “occurrences” or “accidents.” The defects in this case flowed as nature an ordinary consequence of improper construction techniques. Thus, Cincinnati Insurance’s Commercial General Liability Policy did not cover the homeowner’s claims.
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