In 2012, Judge Wettick of the Allegheny County Court of Common Pleas issued two decisions that have the potential to significantly limit the insurance coverage available to Pennsylvania manufacturers – Indalex, Inc. v. National Union Fire Ins. Co. and American Home Assurance Co. v. Trumbull Corporation.
These decisions severely restrict the coverage historically provided by comprehensive general liability policies by holding that those policies do not cover any claims that arise from “faulty workmanship,” including damages that flow from defective products. These holdings may preclude coverage for tort claims asserted against your company if those claims relate to a defective product, even claims for property damage or injuries to third parties. Both decisions are currently on appeal to the Pennsylvania Superior Court.
This is a significant and problematic issue for Pennsylvania manufacturers. Our Insurance Recovery attorneys have successfully litigated this issue for clients despite the difficult and evolving law in this area. We also have helped our clients negotiate endorsements to best protect them from the effects of these rulings.
If you are facing a challenge by your insurers for coverage for a defective product claim, or have any questions on how these decisions may affect your insurance coverage, please contact the authors of this Alert or the Reed Smith attorney with whom you routinely work.
Client Alert 2013-025