No Coverage for Damage to Insured’s Own Work Product, Michigan Appeals Court Rules

May 11, 2016 | Insurance Coverage

An appellate court in Michigan has affirmed a trial court’s decision rejecting insurance coverage for claims alleging a defective installation of solar energy equipment.


Nova Consultants, Inc., contracted with Mid-Michigan Solar, LLC, to install two solar photovoltaic systems. Nova alleged that Mid-Michigan Solar failed to properly install the support posts or piles and the fill material, causing the solar panel arrays to shift or move from their intended installation locations or orientations, resulting in stress and strain on parts of the system.

Mid-Michigan Solar also purportedly failed to properly install electrical components so that they could pass required inspections. Nova asserted that this improper installation endangered the integrity of the system.

Nova claimed that, as a proximate result of Mid-Michigan Solar’s negligence, Nova had sustained damages that included costs to correct the shifting or movement produced by Mid-Michigan Solar’s improper installation, future repair costs, and expenses in remedying the electrical system.

A Michigan trial court found that the insurance policy issued to Mid-Michigan Solar by Employers Mutual Casualty Company did not cover Nova’s claims, and Mid-Michigan Solar appealed to a Michigan appeals court.

The Appellate Court’s Decision

The appellate court affirmed.

In its decision, the appellate court explained that the alleged property damage was confined to Mid-Michigan Solar’s work product; i.e., the solar energy system that it was contracted to install. The appellate court noted that there was no allegation or evidence of damage beyond Mid-Michigan Solar’s own work product.

Therefore, the appellate court ruled, the alleged property damage did not result from an “occurrence” within the meaning of the Employers Mutual insurance policy, and the insurer had no duty to defend or indemnify Mid-Michigan Solar.

The case is Employers Mutual Cas. Co. v. Mid-Michigan Solar, LLC, Nos. 325082, 326553 (Mich. Ct. App. April 19, 2016).

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