In Accident Insurance Co., Inc. v. Mathews Development Company, LLC, No. 24-10726 (11th Cir. 3/18/2025), insured Mathews constructed a home for the Thomas’s, with all work performed by subcontractors. After completion, the Thomas’s sued Mathews alleging a cracked foundation resulted in property damage throughout the home. Mathews’ CGL insurer Accident denied a defense to Mathews based in part on Mathews’ failure to comply with a “Contractors Special Condition Endorsement” which generally required Mathews to obtain from its subcontractors (1) certificates of insurance showing Mathews as an additional insured, and (2) contractual indemnity agreements. The endorsement provided that compliance was a condition to precedent to coverage for any claim based “in whole or in part” on work performed by the subcontractors. Accident then sued Mathews seeking a judicial declaration of no duty to defend. Mathews admitted that it failed to comply with the endorsement’s requirements. The trial court granted summary judgment for Accident. On appeal, applying Alabama law, the Eleventh Circuit affirmed. The court rejected Mathews’ argument that a duty to defend was not precluded because the complaint alleged claims against Mathews that were not based on subcontractor work. Pointing to the expansive “in whole or in part” language in the endorsement, the court states that the complaint alleged that the damages sought were based at least “in part” on subcontractor work.
Subcontractor Warranty Exclusion
