5th Circ. Puts Contractual Liability Exclusion Back On Map

Law360, New York (July 10, 2014, 9:12 PM EDT) -- The Fifth Circuit recently held that Mid-Continent Casualty Co. correctly applied a contractual liability exclusion in a construction defect case, an encouraging sign for insurers fighting indemnification in the wake of a landmark Texas Supreme Court ruling that narrowed the exclusion's scope.

In a published opinion handed down June 27, the federal appeals court agreed with Mid-Continent that an exclusion for liabilities that Arrow Development Inc. takes on solely under a contract barred coverage for homeowners' claims against Arrow over cracks in their home's foundation and walls, as well as problems with a heating, ventilation and air conditioning system.

An arbitrator...

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