Court Finds No Coverage for Complaint's "Unambiguous" Damage Allegations

SALEM, Ore. - An insurer is not obligated to defend its contractor insured where the allegations in the underlying complaint specify only damage to the work product from faulty workmanship, Oregon's Court of Appeals has ruled. State Farm Fire and Casualty Co. v. American Family Mutual Insurance Co., No. A142944 (Ore. Ct. App.).

The court reversed a trial court decision in which American Family Mutual Insurance Co. was ordered to contribute to defense costs for Edgewater Homes, Inc., which was sued by a homeowner over alleged construction defects.

The insurance dispute arose after American Family declined to defend Edgewater …