In a decision with broad implications for the insurance industry, the Pennsylvania Supreme Court has established a bright-line rule holding that an insurer’s duty to defend a policyholder insured against accidents cannot be triggered by allegations of shoddy workmanship.
In Kvaerner Metals v. Commercial Union, the high court reversed the Superior Court decision to overturn a Northampton County Common Pleas judge’s grant of summary judgment. The Supreme Court found that the National Union Fire Insurance Co. of Pittsburgh has no duty to defend or indemnify Kvaerner against a faulty-workmanship claim.
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