Erie Insurance Property & Casualty Co. v. Pioneer Home Improvement, Inc
In Erie Insurance Property & Casualty Co. v. Pioneer Home Improvement, Inc., 206 W. Va. 506, 526 S.E.2d 28 (1999), the Court held that faulty workmanship claims are not within the scope of coverage extended by commercial general liability policies.
In Pioneer, the Court discussed at length the nature of commercial general liability policies and specifically contrasted such policies and the risks they cover to performance bonds and builder's risk policies. 206 W. Va. at 509-12, 526 S.E.2d at 31-34.
The Court cited with approval the following discussion concerning the risks intended to be covered by commercial general liability policies:
The products hazard and completed operations provisions are not intended to cover damage to the insured's products or work project out of which an accident arises. The risk intended to be insured is the possibility that the goods, products or work of the insured, once relinquished or completed, will cause bodily injury or damage to property other than to the product or completed work itself, and for which the insured may be found liable. The insured, as a source of goods or services, may be liable as a matter of contract law to make good on products or work which is defective or otherwise unsuitable because it is lacking in some capacity. This may even extend to an obligation to completely replace or rebuild the deficient product or work. This liability, however, is not what the coverages in question are designed to protect against. The coverage is for tort liability for physical damages to others and not for contractual liability of the insured for economic loss because the product or completed work is not that for which the damaged person bargained.
(Pioneer, 206 W. Va. at 511, 526 S.E.2d at 33.)