No Duty to Defend Additional Insured for Damages Occurring After Completed Operations

In East Coast Residential Associates, LLC v. Builders First Source – Northeast, the plaintiff (unit owner association) hired All-Tech to construct exterior decks, and All-Tech subcontracted the work to F. Dias Construction Company.  F. Dias’ insurance policy contained an endorsement listing All-Tech as an additional insured.  After the decks were built, plaintiff sued All-Tech alleging that the decks were built with improper lumber that led to their deterioration.  F. Dias’ insurer refused to pick up All-Tech’s tender, thus All-Tech impleaded F. Dias and its insurer.  Ultimately, All-Tech settled the underlying lawsuit and moved for summary judgment against F. Dias’ insurer for defense costs and indemnification of the amount All-Tech contributed toward settlement.  The lower court granted All-Tech’s motion.  On appeal the court reversed finding that the additional insured endorsement did not apply to any property damage “occurring after all work that was to be performed by or on behalf of the insured had been completed.”  Because the complaint only alleged damage that occurred after the work was completed, the court held that the insurer had no duty to defend or indemnify All-Tech.

Thanks to Andrew Marra for his contribution to this post.