Defective Flashing, Resulting Damage, and Two Tenders

The GC's CGL responds to property damage caused by an occurrence, but the 'your work' exclusion bars damage to the insured's own work. The subcontractor exception restores coverage for damage to work performed by a subcontractor. The $120,000 to remove and replace the subcontractor's defective flashing is likely excluded because it is the cost of correcting the subcontractor's work itself, unless the exception is written broadly enough to restore it. The $260,000 to repair damaged interior finishes and structural framing is resulting damage to other property and is more likely covered if the damage was accidental and not the intended result of faulty work. The carrier may argue there was no occurrence because defective work is not an accident; many jurisdictions treat unexpected damage from faulty work as an occurrence. The allocation turns on whether the damage is to the subcontractor's work or to other property, and on the exact subcontractor exception.

The additional-insured endorsement's scope controls. If it is limited to liability caused by the subcontractor's ongoing operations, a completed-operations claim may be outside the endorsement. If it covers completed operations, the subcontractor's carrier owes a defense, but the GC stands in the subcontractor's shoes and is subject to the subcontractor's exclusions. The subcontractor's 'your work' exclusion may bar coverage for damage to the subcontractor's own work, but not necessarily for damage to other property. The GC's own carrier may still owe a defense even if indemnity is uncertain, because the duty to defend is broader than the duty to indemnify. The tender should identify the completed-operations trigger and demand a written position from both carriers.

Demand written coverage positions and compare the 'your work' exclusions, subcontractor exceptions, additional-insured endorsements, and completed-operations triggers. The GC should document tender dates and preserve rights against both carriers. The practical leverage is the subcontractor's carrier if the additional-insured endorsement includes completed operations, and the GC's carrier if the $260,000 is damage to other property. The GC may need to fund repairs and pursue declaratory relief or arbitration. The agency should not accept a denial based only on the 'your work' exclusion without forcing the carriers to allocate the $120,000 work cost from the $260,000 resulting damage. A reservation of rights is not a denial, and the GC should continue to request a defense.