Opinion ID: 6778
Heading Depth: 2
Heading Rank: 2

Heading: Work You Performed Exclusion

Text: 16 Taylor's garage insurance policy with Travelers contained the following exclusion from coverage:WORK YOU PERFORMED 17 Property damage to work you performed if the property damage results from any part of the work itself or from the parts, materials or equipment used in connection with the work. 3 18 This type of business risk exclusion is quite common in liability policies, as such policies provide protection to the insured for personal injury or for property damage caused by the completed product, but not for the replacement and repair of that product. T.C. Bateson Constr. Co. v. Lumbermens Mut. Casualty Co., 784 S.W.2d 692, 694-95 (Tex.App.--Houston [14th Dist.] 1989, writ denied) (emphasis added); see also Travelers Ins. Co. v. Volentine, 578 S.W.2d 501, 503-04 (Tex.Civ.App.--Texarkana 1979, no writ) ([I]t has been uniformly held that a liability policy containing such an exclusion does not insure the policyholder against liability to repair or replace his own defective work or product....); Sarabia v. Aetna Casualty and Sur. Co., 749 S.W.2d 157, 157 (Tex.App.--El Paso 1988, no writ) (same). The justification for treating these risks differently is that the insured can control the quality of the goods and services he supplies, while accidental injury to property or persons exposes him to almost limitless liability. Bateson, 784 S.W.2d at 695. As the Bateson court noted: 19 [T]he exclusions are designed to protect insurers from contractors' attempts to recover funds to correct deficiencies caused by the contractors' questionable performance. Their use demonstrates the insurers' belief that the cost of not performing well is a cost of doing business and not considered part of the risk sharing scheme for which general liability policies are written. 20 Id. Thus, a contractor cannot recover from the insurer for his own failure to perform his contract, but can recover for damage other than to his own work, whether or not that work is defective. Hartford Casualty Co. v. Cruse, 938 F.2d 601, 603 (5th Cir.1991) (emphasis added) (internal quotation omitted).