US District Court construes construction exclusion narrowly

In my last post I wrote about General Casualty Co. of Wisconsin v. Five Star Building Corp., 2013 WL 5297095 (D. Mass.), in which rain infiltrated a building when temporary patches put up by Five Star during HVAC work for UMass failed.

Five Star's insurer argued that coverage was excluded by an exclusion for property damage "to that particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the 'property damage' arises out of those operations."

The insurer argued that the entire roof was the "particular part" on which Five Star was working and that therefore all damage to the roof was excluded. 

The court held that the exclusion does not extend beyond "the essence" of the insured's work.  It held that Five Star's work extended only to the replacement of the ventilation system, not to repair or replacement of  the roof.  Although as part of its work Five Star was required to punch holes in the roof, that roof work was merely incidental to the replacement of the HVAC system.  Therefore the exclusion does not apply.