On Wednesday, the Fifth Circuit reversed a lower court’s decision that the “Your Work” exclusion of a CGL policy precluded coverage for damages to a Mississippi oil refinery’s reactor by a caused by a contractor, Cat Tech, LLC.  American Home Assur. Co. v. Cat Tech L.L.C., ) F.3d, 2011 WL 4583838 (5th Cir. 2011.)  The ruling means that two insurers may be on the hook for some of the damages allegedly caused by Cat Tech, overturning the .lower court’s finding that the damages were entirely excluded from the policies.

The  Fifth  Circuit  looked  at  the  “your  work”  exclusion  in  two  policies  issued  by  American  Home Assurance and National Union Fire Insurance. After reviewing Texas cases on point, the court found that the "your work" provision excludes coverage only for the damage to that portion of customer's property upon which insured servicing company had performed repair services, defective or otherwise.  The court held that the exclusion did not preclude coverage for any damage to customer's property that insured did not repair or service.  Finding a fact issue existed as to the extent of the work and the resulting damage, the Fifth Circuit remanded the case to the trial court for further proceedings.

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