This week S.C. Governor Nikki Haley signed into law legislation to address the state’s Supreme Court ruling on Crossmann Communities of North Carolina, Inc. v. Harleysville Mutual Insurance Co.(Crossman).
Earlier this year, the state Supreme Court issued a unanimous ruling in the Crossmann case, eliminating commercial general liability coverage on claims and lawsuits arising from defective workmanship because it did not meet the definition of an “occurrence” under the policy.
Courts in 29 other states, including Georgia, North Carolina, Mississippi, Arkansas, and Louisiana, had reached the same conclusion.
S 431 states that a policy providing liability insurance to a construction professional must be broadly construed in favor of coverage. In addition, the bill states coverage should be provided for property damage arising from the construction professional’s work constituting an occurrence and not an intended or expected consequence.
Property Casualty Insurers Association of America’s (PCI) state government relations manager, Micaela Isler, opposed the bill because if enacted, the legislation could mean increased insurance rates for South Carolina consumers.
The American Insurance Association (AIA) and National Association of Mutual Insurance Companies (NAMIC) also joined in the opposition.
Source: PCI and Carolinas AGC
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