January 30, 2013 Articles

To Expand Contractual Liability Exclusion or Not to Expand?

Have you considered the real value of doing alternative dispute resolution (ADR) research in your case?

by Jim Warren and Brent Cole

The Fifth Circuit’s recent decision to expand the contractual liability exclusion to preclude coverage for a contractor’s failure to construct a project in a workmanlike manner—in Ewing Construction Co., Inc. v. Amerisure Insurance Co.—was described by one insurance law commentator to be “so anomalous” that it commanded attention. See Craig F. Stanovich, “Contractual Liability Exclusion—The Ball Is in Your Court,” IRMI.com, June 2012. The opinion was subsequently withdrawn, and the court certified questions to the Texas Supreme Court on the issue, leaving the issue open at least for now. This article explores the case law on this issue and concludes that while the Fifth Circuit’s approach in its original ruling runs counter to the majority view, it is not without precedent in Texas and in other jurisdictions.

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