Opinion ID: 785255
Heading Depth: 3
Heading Rank: 2

Heading: Property Damage/The Your Work Exclusion

Text: 38 Appellants also assign as error the district court's holding that the underlying Love action sought recovery for property damage under these liability policies. As defined in the policies, property damage means: 39 a. Physical injury to tangible property, including all resulting loss of use of the property; or 40 b. Loss of use of tangible property that is not physically injured. 41 The policies exclude coverage, however, for property damage to impaired property arising out of a defect, deficiency, inadequacy or dangerous condition in `your product' or `your work.' 42 Appellants' contention, as we understand it, is that because Standard was performing work pursuant to a contract with the State, the tort it committed against Love — a stranger to that contract — is not covered either because it was caused merely by faulty workmanship and/or because the injury arose out of Standard's work. 43 We agree with the district court's resolution of this issue. The trial court reasoned that, since Love was a third person, not a party to Standard's contract with the State, the damage to her property from the wrongful dumping was not subject to the exclusion for your [the insured's] work. 44 This principle was derived from the decision of the Supreme Court of Tennessee in Vernon Williams & Son Constr., Inc. v. Continental Ins. Co., 591 S.W.2d 760 (Tenn.1979). There, speaking of this type of coverage, the court pointed out: The coverage is for tort liability for physical damages to others and not for contractual liability of the insured for economic loss because the product or completed work is not that for which the damaged person bargained.  Id. at 764 (citation omitted) (emphasis added). 45 Further, it clearly appears that property damage claims of third persons resulting from the insured's breach of an implied warranty are covered unless the claimed loss is confined to the insured's work or work product. Id. (emphasis added). 46 In the instant case, it is not the manner in which the dumping was performed (the work) that is faulty or caused damage, but rather that the dumping itself at the location in question was unauthorized. Some damage to Love's land inevitably resulted. The damage was to the land, not to the insured's work. Therefore, there is coverage for property damage and the your work exclusion does not apply. Accord Standard Fire Ins. Co. v. Chester-O'Donley & Assoc., Inc., 972 S.W.2d 1, 10 (Tenn.App.1998) (The exclusion does not apply if there is damage to property other than the insured's work.) (discussing extensively the history of this policy language and many other cases and texts); Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 405 A.2d 788, 791-95 (1979) (extensive discussion). 2