THREE AUTO ACCIDENTS ONE “OCCURRENCE” UNDER CGL POLICY ISSUED TO ROAD CONSTRUCTION COMPANY

April 2, 2012

In a dispute between the primary carrier and the excess carrier, a district court in the Austin Division of the Western District of Texas recently ruled that a construction defect by a road construction company that caused three car accidents was only one occurrence and not three under its CGL policy.  Twin City Fire Ins. Co. v. Illinois Nat’l Ins. Co., No. 1:11-cv-00144-ss (W. Dist. . – Austin Div., March 12, 2012) (slip opinion)  The primary carrier, with limits of $2 million per occurrence and $4 million aggregate, argued that the event was only one occurrence.  The excess carrier, with $25 million above the primary, argued that each accident should be a separate occurrence.  In reaching its decision, the court reviewed the relevant policy language and Texas law concerning “occurrence” under a CGL policy.  From its review of the policy and the law, the court stated “CEC’s allegedly defective construction is the only event for which it is liable … once the allegedly defective road project was complete, CEC would be liable for any damages resulting therefrom … there was but a single “occurrence” that could give rise to liability ….” The court entered summary judgment for the primary carrier.