Illinois Supreme Court Changes Law for Construction Defect Coverage
Highlights
The Illinois Supreme Court opened the door for commercial general liability (CGL) policies to potentially cover construction defect cases
The court held CGL policies can provide coverage in Illinois for damage caused by inadvertent construction defects
This decision reverses a previous tendency among Illinois courts to find no coverage for faulty workmanship either because it is inherently not accidental or because there was no damage beyond the insured defendant’s scope of work
The Illinois Supreme Court has opened the door for commercial general liability (CGL) insurance policies to cover construction defect cases. Overturning years of lower court cases, the court held that CGL policies can provide coverage for damage caused by inadvertent construction defects. Faulty workmanship qualifies as an accidental “occurrence” and that actual damage, even within the insured’s scope of work, is insurable “property damage.”
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