Fortunately for Utah policyholders, a recent District of Utah decision has continued the trend toward liberalizing Commercial General Liability (“CGL”) coverage in Utah. In The Cincinnati Ins. Co. v. Spectrum Devel. Corp, the District of Utah held that defective construction can be an “occurrence” so as to trigger coverage under a CGL policy.
CGL policies generally cover amounts that an insured “becomes legally obligated to pay as damages because of property damage” caused by an “occurrence.” The standard definition of “occurrence” is “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Utah courts have had considerable difficulty determining whether defective construction is an “accident.”
The previous rule in Utah was that conduct, and the result of conduct, is not accidental if it is deliberate or intentional, even if the result was neither deliberate nor intentional. Until recently, Utah courts borrowed the reasoning of the Washington Court of Appeals, which put it this way:
[A]n accident is never present when a deliberate act is performed, unless some additional, unexpected, independent, and unforeseen happening occurs which produces or brings about the result[.]
Safeco Ins. Co. of Am. v. Dotts, 38 Wash.App. 382, 685 P.2d 632, 633-34 (1984).
Two previous Utah cases, Rosenberg and Geary, illustrate the above rule. In Geary, the Utah Court of Appeals held that bodily injury resulting from a shotgun blast was not accidental because the shooter deliberately pulled the trigger, whether or not he had any intention to harm the victim. See State Farm Fire & Cas. Co. v. Geary, 869 P.2d 952, 955-6 (Utah Ct. App. 1994). Similarly, in Rosenberg, bodily injury resulting from a cherry bomb was not accidental because the bomb was deliberately and intentionally thrown. See Fire Ins. Exchange v. Rosenberg, 930 P.2d 1202, 1205 (Utah Ct. App. 1997). Continue Reading Across the Spectrum: Utah’s Recent Move Toward a Proper Interpretation of “Occurrence” In Commercial General Liability Policies