6th Circuit Rejects Building Owner's Bid for Coverage for 'Ensuing Loss'

CINCINNATI - A federal appeals court has denied a commercial building owner's appeal of an adverse coverage ruling, rejecting the insured's argument that an ensuing loss exception to a workmanship exclusion should allow it to recoup millions of dollars spent on repairs to construction defects. TMW Enterprises, Inc., et al. v. Federal Insurance Co., No. 09-1542 (6th Cir.).

The 6th Circuit panel decided 2-1 in favor of Federal Insurance Co. on Aug. 25, concluding that the policy unambiguously excluded the claim by TMW Enterprises Inc.

TMW purchased a combined condominium and commercial building in 2004 and discovered during renovations …