Allegations of Developer’s Intentional Conduct Doomed Coverage Bid

June 21, 2016 | Insurance Coverage

An appellate court in Illinois, affirming a trial court’s decision, has ruled that an insurance company did not have to defend or indemnify a developer in connection with a lawsuit alleging that the developer had failed to properly install a roof system, or to correct the defect in the roof system, where the complaint did not contain any allegations of negligence on the part of the developer.


West Van Buren LLC, the developer, constructed a condominium development in Chicago, Illinois, and subcontracted installation of the roof to Total Roofing & Construction Services, Inc. The subcontract provided that Total Roofing would insure and indemnify the developer against liability for Total Roofing’s work. Total Roofing obtained a commercial general liability insurance policy through Westfield Insurance Company that listed the developer as an additional insured.

About a year after construction, the condominium association for the building claimed that construction defects in the roof caused water to infiltrate into the building and individual condominium units. It also caused damage to personal and other property in the condominium units.

The association demanded that the developer reconstruct the roof.  After the developer refused, the association paid for the repair work, which cost more than $309,000.

The association sued the developer. The developer notified Westfield, which then sought a declaration that it owed no duty to defend or indemnify the developer in the association’s lawsuit.

The trial court ruled in favor of Westfield, and the developer appealed.

The Appellate Court’s Decision

The appellate court affirmed.

In its decision, the appellate court explained that the complaint alleged that the developer had failed to properly install the roof system and had not corrected the defect. It noted that the allegation of “intentional conduct” was incorporated in all counts of the association’s complaint – and that the general negligence of the developer was not alleged in the complaint.

Accordingly, the appellate court found that any alleged damage to the building or individual units “was not an accident,” and therefore, was “not the result of any occurrence.” Westfield did not have a duty to defend the developer in the association’s action or a duty to indemnify, the appellate court concluded.

The case is Westfield Ins. Co. v. West Van Buren, LLC, No. 1-14-0862 (Ill. Ct. App. May 4, 2016).

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  • Robert Tugander

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