The law often turns on the definition of a single word. In a recent decision, the Georgia Supreme Court unanimously defined the use of the word “occurrence” with respect to certain commercial insurance policies. The underlying case arose from allegations of faulty home construction.
Curiously, the faulty construction did not take place in Georgia, but California. Sixteen homeowners in that state filed a class action against their home builder over inadequately constructed foundations. The homeowners alleged the improper construction caused “terrible physical damage” to their properties.
Georgia came into the picture because of the home builder’s relationship with an insurance company providing a commercial general liability (CGL) policy subject to that state’s law. Normally, a CGL policy pays any legal liabilities arising from “bodily injury” or “property damage” caused by an “occurrence” in the specified coverage territory. In this case, the home builder’s CGL policy defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful condition.”