South Carolina “property damage” caused by an “occurrence,” and “your work” exclusion

In Builders Mut. Ins. Co. v. Kalman, No.: 2:07-CV-3609-PMD (D. S.C. Dec. 8, 2009)(Duffy), the insured general contractor was sued by the homeowner seeking damages because of moisture intrusion related property damage, including mold growth, to the home only allegedly caused by construction defects. Most of the defective work was performed by subcontractors. The court granted the insurer’s motion for summary judgment. The court first determined that the alleged property damage to property beyond the defective work itself resulting from moisture intrusion constituted property damage caused by an “occurrence.” However, the policy included the CG 22 94 10 01 endorsement which effectively deletes the subcontractor work exception from the “your work” exclusion. The court held that, because the entire home constituted the insured’s work, all of the alleged property damage, including the “unhealthy microbial growth,” fell within the exclusion.