Amerisure wins litigation over providing coverage to Builder
Ahrens Construction sub-contracted to build a roof over a natatorium in Kalamazoo County. Its work was apparently defective and resulted in a chronic leaking condition. The Contractor sued it for the cost of repair and obtained a verdict in excess of $300,000.00 that included compensation for damage to other property in the building. Amerisure was Ahrens' commercial liability insurer, however, it refused to defend the underlying lawsuit. After the verdict, Ahrens sued Amerisure, arguing that it was at least liable for the damage to other property that resulted from Ahrens' defective workmanship.The Trial Court and Court of Appeals rejected Ahrens' claims, even though the policy, as written, would have provided liability for such property damage. The Court of Appeals noted, however, that in the original lawsuit, the general contractor had not claimed negligence by Ahrens and had not sought compensation for damages to "other" property. Therefore, Amerisure was within its rights in refusing to provide liability coverage: Ahrens' remedy, if any remained, was to appeal in the underlying case the award of compensation that exceeded the remedy sought in the contractor's pleadings.