In a unanimous decision, the Mississippi Supreme Court ruled on Feb. 11 that contractors are covered under their commercial general-liability policies for subcontractor work later found to be defective, adding momentum to a national battle being fought over whether insurers are actually providing coverage defined and paid for in those policies.
The ruling has national implications “because the policies being written and enforced throughout the U.S. are identical to the policies the Mississippi court has addressed,” says Mike Kennedy, general counsel of the Associated General Contractors. “The court made it clear that insurance carriers should be held to the terms of the policies that they choose to write, recognizing that carriers are free to write their policies differently if they wish to exclude certain coverages.”