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Insurance — CGL policies — scope of work exclusion

By: WISCONSIN LAW JOURNAL STAFF//January 5, 2012//

Insurance — CGL policies — scope of work exclusion

By: WISCONSIN LAW JOURNAL STAFF//January 5, 2012//

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Wisconsin Court of Appeals

Civil

Insurance — CGL policies — scope of work exclusion

Where a contractor’s work was limited to one wall, the scope of work exclusion in its CGL policy does not exclude coverage for damage to the rest of the building.

“Society argues the phrase ‘that particular part’ applies to the entire engine room building and all equipment located in that building. Society argues this is so because the contract called for the removal and reconstruction of the entire south wall of the building, which required shoring up the rest of the building as part of the necessary work, and consequently, the contract’s ‘work’ included the entire engine room. Society asserts that the k.(5) exclusion applies because the contractors worked in and had control of the entire engine room building, not just one ‘small area of the footing where Flint was excavating.’ Thus, Society argues, damages arose out of work being performed as part of the contractor’s operations and therefore, exclusion k.(5) applies.

“Society’s argument rests on the inaccurate assertion that RS and Flint were contracted to work on the entire engine room building, not just the south wall. The Bid Memo did not call for work to be performed on the entire engine room building. The scope of the contracted work was limited to the south wall of the engine room. Society is also wrong in representing that the work entailed shoring up the entire engine room. According to diagrams detailing how the south wall was to be shored-up and photographs taken after the shoring of the wall, it is readily apparent that only the south wall was shored, not the entire engine room. This makes sense because the south wall was the only wall being removed and replaced. Moreover, nothing in the submissions indicates that the south wall supported the concrete slab first floor, or the east and north walls of the engine room. In any event, the defect was the soil erosion caused by faulty excavation and the damages to the second floor, the roof, and the related structures and mechanicals constitutes damage to property other than ‘that particular part’ on which the work was being performed.”

Reversed and Remanded.

Recommended for publication in the official reports.

2009AP2432 Acuity v. Society Insurance

Dist. IV, Monroe County, McAlpine, J., Higginbotham, J.

Attorneys: For Appellant: Curtis, James G., Jr., La Crosse; Doherty, Francis M., La Crosse; For Respondent: Mohr, James W., Jr., Hartford; Schultz, Bruce A., Madison

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