A Louisiana Court of Appeal reversed summary judgment for an insurer which had dismissed the insured's claims for economic damages under a CGL policy where it found those losses resulted from "property damage" within the meaning of the policy and therefore triggered coverage. Gibbs Constr., L.L.C. v. Nat'l Rice Mill, L.L.C., 2018 WL 992527 (La. App. 4 Cir. Feb. 21, 2018).

The insured, a general contractor, was insured under a CGL and excess policy. The insured performed allegedly faulty renovations at an apartment complex which resulted in multiple instances of water intrusion and damages to the property's interior. After completion of the project, the insured sued the apartment complex for failure to make payments pursuant to the construction contract, and the complex counter-sued the insured and its insurers seeking delay damages, liquidated damage, loss of income/business reputation and rent concessions due to the property damage arising out of the faulty construction. The insurers filed motions for partial summary judgment, in relevant part, on the basis that the economic losses were not "property damage" within the meaning of the policies and coverage was, therefore, not available for those claims. The trial court granted summary judgment for the insurers and the insured appealed.

The Court of Appeal reversed and remanded finding that because the claimant's complaint included allegations of physical property damage to the apartment complex, coverage existed for the subsequent delay and loss of use damages. The court noted that although claims solely for economic losses generally are not covered by CGL policies because of policy exclusions, such claims are not precluded due to "any inherent limitation in the general grant of coverage for 'property damage' as required by the insuring agreement," and, therefore, the economic damages were not automatically excluded. The case was remanded to consider whether an "impaired property" exclusion nonetheless barred coverage for the economic damages.

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