Broad CGL Ruling May Leave Texas Contractors In Lurch

Law360, New York (April 8, 2011, 5:56 PM EDT) -- A recent Texas Supreme Court decision that broadly interprets a contractual liability exclusion commonly found in commercial general liability policies has caused some insurers to start refusing to indemnify construction companies against underlying breach of contract claims, experts say.

Prior to 2010, when the Texas Supreme Court issued its decision in Gilbert Texas Construction LP v. Underwriters at Lloyd's London, most case law and insurance treatises said contractual liability exclusions only applied to indemnity contracts, according to experts who represent both insurers and policyholders.

But the...
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