Insurer Sues to Avoid Liability for Alleged Defects in Ill. Development

CHICAGO - Clarendon America Insurance Co. filed a declaratory judgment action against an insulation company on Sept. 20, saying a policy issued to the company doesn't cover mold or other damage arising from any alleged wrongdoing by the company during construction of a 160-home development. Clarendon America Insurance Co., No. 06CV5103 (N.D. Ill.).

Clarendon, a surplus lines insurer, is relying on 'Tract Housing Operations,' 'Mold,' and other exclusions contained in a general liability policy issued to Res-Comm Insulation Inc., covering a one-year period beginning on June 25, 2002.

Res-Comm was named in a breach-of-contract and negligence lawsuit filed by Lakewood …