The home construction 'moral hazard'

In the case Westfield Insurance Co. v. Sheehan Construction Co., defective work by one of Sheehan's subcontractors resulted in a $2.8 million construction-defect judgment against Sheehan. Sheehan wanted Westfield Insurance to indemnify the expense of the judgment under Sheehan's general commercial liability policy, which expressly covered accidental bodily injury and property damage, but expressly excluded property damage caused by Sheehan's own work.

The trial court found that numerous definitions and exclusions in the policy weighed against Westfield's liability, and ruled in favor of Westfield.

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