The South Carolina Court of Appeals recently held that a “your work” exclusion excluded coverage for cost of repairs related to the insured’s subcontractor’s use of defective sealant tape in construction. Precision Walls, Inc. v. Liberty Mut. Fire Ins. Co., 2014 WL 3610895 (S.C. Ct. App. July 23, 2014).
After tape used by the insured subcontractor to seal insulation joints on a building project began to fail, a brick veneer exterior wall had to be torn down and the defective tape replaced. After the contractor deducted the cost of tearing down the brick wall from the subcontractor’s contract, the subcontractor submitted a claim to its CGL insurer, which denied the claim pursuant to the policy’s standard “your work” exclusion. The insured subcontractor then sought a declaration that the policy did provide coverage. After the trial court held that there was no coverage, the insured appealed.
Affirming, the South Carolina Court of Appeals held that the policy’s “your work” exclusion, which excludes coverage for “any property that must be restored, repaired, or replaced because ‘your work’ was incorrectly performed on it,” barred coverage for the insured’s claim. The court held that because the exclusion extended to material furnished in connection with such work, the defective tape fell within its ambit.