Business Risk Exclusion Means No Coverage for Toppled Conn. House

The Hanover won’t have to pay $26,000 in claims on behalf of a Connecticut contractor who accidentally knocked over the house he was working on, a Connecticut Superior Court has ruled.

The decision comes from a lawsuit by homeowner James Barber, who hired a contractor, Craig Berthiaume, to repair his house. During the repairs, Berthiaume raised Barber’s house in order to build new piers. However, after doing so, Barber’s house toppled over, and caused $26,000 in damage.

Barber and his insurer, Lloyd’s of London, sued Berthiaume and his insurer, The Hanover Insurance Co., after they tried to recover the cost of the damages and both declined to pay.

Initially, the court said the toppling of the house was an occurrence under Berthiaume’s general liability policy, was therefore covered, and ruled that The Hanover was obligated to pay.

But The Hanover re-argued the case, saying that the toppling of the house was subject to the business risk exclusion of the general liability policy, which read: “This insurance does not apply to ‘property damage’ to: [t]hat particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the “property damage’ arises out of those operations.”

The trial judge, in his ruling, said “it is clear that the house in this case was being raised as part of the contract Berthiaume was obligated to perform… therefore the damages to the house come with the business risk exclusion of the policy.”

Topics Commercial Lines Business Insurance Connecticut