Court Opinion

ID: 9582407
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:26:21.982329+00
Date Added: 2024-06-11T13:37:45.867825
License: Public Domain

Justice PLEICONES.
I respectfully dissent. We have held that faulty workmanship by a subcontractor which results in property damage only to the work product itself is not an occurrence within the meaning of that term in a comprehensive general liability (CGL) policy. L-J, Inc. v. Bituminous Fire and Marine Ins. Co., 366 S.C. 117, 621 S.E.2d 33 (2005). Here, the general contractor’s “work product” is the entire home, including the stucco, the framing, and the exterior sheathing. In my view, there is no coverage under the CGL policy because there is no occurrence, rather only faulty workmanship. L-J, Inc., supra.
As we explained in Century Indemnity Co. v. Golden Hills Bldrs., Inc., 348 S.C. 559, 561 S.E.2d 355 (2002):
A comprehensive general liability policy, such as the one at issue, provides coverage “for all the risks of legal liability encountered by a business entity,” with coverage excluded for certain specific risks. Rowland H. Long, L.L.M., The Law of Liability Insurance, § 3.06[1] (2001). This type of insurance “is not intended to insure business risks, i.e., risks that are normal, frequent, or predictable consequences of doing business, and which business management can and should control or manage.” Id. § 10.01[1], Specifically, “[t]he policies do not insure [an insured’s] work itself, but rather, they generally insure consequential risks that stem from that work.” Id. See also Isle of Palms Pest Control Co. v. Monticello Ins. Co., 319 S.C. 12, 459 S.E.2d 318 (Ct.App.1995), aff'd, 321 S.C. 310, 468 S.E.2d 304 (1996) (general liability policy is intended to provide coverage for tort liability for physical damage to property of others; it is not intended to provide coverage for insured’s contractual liability which causes economic losses); Sapp v. State Farm Fire & Cas. Co., 226 Ga.App. 200, 486 S.E.2d 71, 75 (1997) (noting risk intended to be insured is possibility that work of insured, once completed, will cause bodily injury or damage to property other than to completed work itself, and for which insured may be found liable; coverage applicable under CGL policy is for tort liability for injury to persons *200and damage to other property and not for contractual liability of insured for economic loss because completed work is not that for which the damaged person bargained). Id. at 565-66, 561 S.E.2d at 858 (emphasis in original).
Under the relevant provisions of this CGL policy, Auto Owners is responsible for “property damage” that is caused by an “occurrence.” “Occurrence” as used in the policy “means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Faulty workmanship by subcontractors which leads to deterioration or damages the work product itself is not an accident within the meaning of a CGL policy. L-J, Inc., supra.6 In L-J, as the majority notes, we also explained that there may be coverage where faulty workmanship causes third party bodily injury or damage to property other than the contractor’s work product. Here, we have neither bodily injury nor damage to anything other than the contractor’s work product.
The majority relies on High Country Assocs. v. New Hampshire Ins. Co., 139 N.H. 39, 648 A.2d 474 (1994), and finds that damage caused to other parts of the house by the stucco subcontractor’s faulty workmanship is a claim of property damage beyond that of the defective work itself, and thus covered under the policy. I disagree.
As noted above, the “work product”7 is the entire home constructed by Trinity for the Homeowners. See L-J, Inc., supra. While I agree that High Country appears to distinguish between the construction of the condominium units themselves (the work product) and the damage done to the structure of these units, a later New Hampshire case which *201cites High Country makes it clear that coverage under a CGL policy exists only where there is actual damage to property other than the insured’s work product. Webster v. Acadia Ins. Co., 156 N.H. 317, 934 A.2d 567 (2007) (CGL coverage where negligent installation of new roof caused damage to preexisting rafters). As I understand High Country in light of Webster, there would be no coverage here as only Trinity’s “work product” has been damaged as a result of the stucco subcontractor’s faulty workmanship.
Finally, I do not believe we need look at the terms of a policy’s exclusion in order to determine coverage. Under existing South Carolina law, there is no occurrence here, thus no property damage, and therefore no coverage. The “your work” exclusion applies only where there is, in fact, “property damage” to “your work.” Absent that threshold showing of coverage, there is no reason to reach the exclusion, much less the subcontractor exception to the exclusion. Compare Laid-law Enviro. Serv. (TOC) v. Aetna Cas. & Sur. Co. of Ill., 338 S.C. 43, 524 S.E.2d 847 (Ct.App.1999) (exclusion does not create coverage but limits it).
I would reverse.

. In my opinion, the definition of "accident” in Travelers Indent. Co. of Am. v. Moore & Assoc., 216 S.W.3d 302 (Tenn.2007), relied upon by the majority, is fundamentally inconsistent with the definition we adopted in L-J, Inc., supra. See Gen. Sec. Indent. Co. of Ariz. v. Mtn. States Mut. Cas. Co., 205 P.3d 529 (Colo.App.2009) (identifying L-J, Inc. as following majority rule that construction defect claims are not accidents under a CGL policy and Moore as a minority rule decision).

. The CGL does not use this term: it is a combination of "your product” and "your work,” both terms defined under the contract. Here, we are actually talking about "your work” which means:
a. work or operations performed by you or on your behalf; and
*201b. materials, parts or equipment furnished in connection with such work or operations.