Court reaffirms that Hastings Mutual must pay for damages caused by its insured-roofer's negligence
Oak Creek Apartments hired Manuel Roofing to repair the roof of one of its buildings. The roofer was required, under the contract, to secure the interior against inclement weather. Unfortunately, it apparently didn't do an adequate job and the residents incurred substantial interior damage. When the Apartment complex sued Manuel, it sought coverage from its commercial liability carrier, Hastings Mutual. Hastings argued that it owed no indemnfication under its liability coverage because the damage resulted from Manuel's deficient performance and did not constitute an "occurrence" under the policy.
The Court rejected Hastings' analysis, pointing out that it was inconsistent with existing law relating to work product and "occurrence." The Court acknowledged that there was a difference of opinion with regard to what constitutes an "occurrence" but that Hastings' defense did not qualify under either interpretation. Since the damage involved property in addition to Manuel's work product (the roof) the damage was an "occurrence" under the liability policy: The only disagreement with this analysis was a previous holding that would require proof that the contractor actually intended for the damage to occur. Under either of these analyses, Manuel had paid for coverage for the apartment owners' interior property.