Insurer May Assert 'Known Risk' Defense in Drywall Coverage Case, Judge Rules

NORFOLK, Va. - A federal judge has permitted Builders Mutual Insurance Co. to amend its answer in a Chinese drywall coverage case, finding that the insurer may assert the "known risk" affirmative defense, despite trial being just weeks away. Builders Mutual Insurance Co. v. Dragas Management Corp., et al., No. 09-185 (E.D. Va.).

Judge Tommy E. Miller of the U.S. District Court for the Eastern District of Virginia ruled March 11 that because Builders Mutual moved to amend the answer before the close of discovery, and because it became aware of the availability of the defense from documents provided by …