An insured purchased brick, mortar, and other masonry materials from a local building supply company, then used its own employees to build the brick veneer and masonry of a home, install the windows, and finish the exterior deck. After the work was completed, cracks formed in the masonry that let water infiltrate and damage other parts of the home - and the question became whether the building supply company, which only furnished materials and did no construction work itself, could be pulled into the claim as a "subcontractor."
Notable Timestamps
[ 00:49 ] - Mike lays out the scenario: an insured built brick veneer and masonry walls with materials bought from a local building supply company, and when the finished masonry later let water infiltrate, the question became whether that supplier counts as a "subcontractor" too.
[ 01:52 ] - Brennan voices the supplier's likely defense - "we're not a subcontractor, we're a hardware store" - setting up why the subcontractor label matters so much here.
[ 02:34 ] - The hosts turn to the j(5) ongoing-operations exclusion, noting it doesn't carve subcontractors back in the way the completed-operations exclusion under l does.
[ 03:51 ] - Under the "your work" definition, part (2) sweeps in "materials, parts or equipment furnished in connection with" the work - potentially pulling a materials supplier into the exclusion even without any hands-on construction.
[ 05:07 ] - Brennan unpacks the apparent contradiction: j(5) excludes subcontractor work during ongoing operations, but l explicitly carves subcontractors back in once the work is completed.
[ 08:10 ] - When a "subcontractor" might really be an employee: the hosts run through the classic independent-contractor factors - control over the work, method of payment, who furnishes materials/tools, control of the premises, and the right to discharge.
[ 10:00 ] - Brennan cites Mosser Construction, Inc. v. Travelers Indemnity Co. (2011, Ohio), where a court had to decide whether a supplier furnishing wastewater-treatment aggregate counted as a subcontractor.
[ 12:21 ] - The hosts note two courts could look at identical policy language and the same facts and reach opposite conclusions - "a mystery wrapped in a conundrum."
[ 16:02 ] - A recap of the key takeaways on when a supplier can be treated as a subcontractor under the Your Work exclusion.
Your PLRB Resources
Coverage Question: Is an Insured's Subcontractor's Faulty Workmanship an "Occurrence" in Iowa? - https://members.plrb.org/documents/in-iowa-is-an-insureds-subcontractors-faulty-workmanship-an-occurrence-bed-2026211
Coverage Question: Is There Coverage Under the CGL Policy for Defective Floor Installation Work? - https://members.plrb.org/documents/is-there-coverage-under-the-cgl-policy-for-the-alleged-damages-involving-the-defective-floor-installation-work-2023-08-31
Case Law: Mosser Construction, Inc. v. Travelers Indemnity Co. (2011) - https://members.plrb.org/documents/mosser-construction-inc-v-travelers-indem-co-2011
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/ask-plrb/) at no additional charge to you or your company.
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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
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