Diamond Post

  We wrote to you last month outlining the potential implications of the South Carolina Supreme Court's decision in Crossmann Communities of N.C., Inc. v. Harleysville Mutual Insurance Co., which has caused consternation and confusion in the legal and insurance communities over the interpretation and coverage afforded under commercial general liability (CGL) policies.  Numerous parties and amici - friends of the court - have petitioned the Supreme Court to re-hear the case.  Also, the South Carolina Legislature has taken up the cause in an effort to "cure" the effects of Crossmann and we want to take this opportunity to update you on the activity that is currently taking place in Columbia.

Legislation in the House is being fast-tracked.  The bill pending in the State Senate is very similar in approach and scope to the House bill and both appear to be based on legislation enacted in Colorado addressing construction-related claims. In essence, the legislation would reverse the effects of the Crossmann decision by eliminating the case's requirement that a fortuitous event or an accident exist to constitute an "occurrence." Not surprisingly, the bills raise numerous questions.  For example, what is the scope of the insured's work product under the bills?  What effect will the legislation have on existing rules pertaining to contract interpretation and the burden of proof?  Will the legislation require the insured to contribute to the defense costs of claims not covered by the policy?

If and when the legislation is enacted, these questions and others will undoubtedly take center stage.  It is going to take time and experience to interpret and understand the impact of the legislation. As always, the Business & Commercial litigators of Gallivan, White & Boyd, P.A. will keep you apprised of developments in this law.  Should you have any questions about the interpretation of your CGL policy, please do not hesitate to contact us - our lawyers have a wealth of experience defending insurers and insureds and navigating the traps and travails this type of decision presents to insurers and policyholders.