When is Occurrence Considered to Have Happened?

[risky business]

In construction Insurance.
Plumbing contractor purchases an occurrence policy. Installs new plumbing
in apartment building. Everything seems OK but 16 months later the building collapses due to the ground washing out from underneath it because the underground intake piping for the building was not joined correctly and leaked with the leak growing larger over time.

Insurance company A: on policy when insured completed the work declined saying the occurrence was the collapse of the building that happened 16 months later when a different insurance carrier was on the policy.
Insurance Company B: on the policy when the building collapsed declined saying the occurrence was back 16 months earlier when insured completed the job and did not have the joint correctly put together causing the lead which caused the washout which caused the building collapse.
and they had a no prior work exclusion.

With an occurrence policy, the insured should have coverage under Company A. Do you agree or disagree?

 

[hesse]

Yes carrier A is on the hook if he is found liable.


Claims made would be carrier B if he had purchased prior acts coverage

 

[InsCommentary]

Assuming ISO CGL language, the policy in force at the time of the BI or PD is the one that responds. In that case, Insurance Company B would be the one to respond.

 

[AZDave]

"and they had a no prior work exclusion."

Why would he now have a policy with a prior work exclusion?

 

[Gulfman]

Yes carrier A is on the hook if he is found liable.


Claims made would be carrier B if he had purchased prior acts coverage

I'm no expert BUT: "An Occurrence policy protects you from any covered incident that “occurs” during the policy period, regardless of when a claim is filed. An occurrence policy will respond to claims that come in – even after the policy has been canceled – so long as the incident occurred during the period in which coverage was in force"

Seems like hesse is correct.

 

[InsCommentary]

Coverage is triggered when the BI and/or PD took place, not when the negligent act occurred. This is from the ISO CGL policy:

This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory";

(2) The "bodily injury" or "property damage" occurs during the policy period; ....

If i do something negligently that results immediately in BI/PD, then the policy in force at that time responds. If I do something negligent, but the BI/PD arising from that negligence doesn't take place for 5 years, then the policy in force 5 years after the negligent act is the one that responds.