Frankenmuth Mutual Insurance Company v. Choate Construction Company, Inc

Frankenmuth Mutual Insurance Company sought a declaratory judgment that it had no duty to defend or indemnify Choate Construction Company in an underlying construction defect lawsuit. The underlying suit was brought by a condominium association alleging that Choate, as general contractor, caused water intrusion and property damage through faulty workmanship. The insurer denied coverage, arguing the alleged damage did not constitute an "occurrence" and fell within policy exclusions. The U.S. District Court for the Northern District of Georgia granted summary judgment in favor of Frankenmuth. On March 28, 2023, the Eleventh Circuit affirmed, holding that under Georgia law the complaints did not allege "property damage" caused by an "occurrence" and that the "your work" exclusion barred coverage for damage to the project itself.

The Eleventh Circuit affirmed the district court's grant of summary judgment in favor of Frankenmuth, holding that the insurer owed no duty to defend or indemnify Choate Construction Company.

Whether the CGL policy issued by Frankenmuth covered property damage arising from alleged construction defects, specifically whether faulty workmanship qualified as an "occurrence" and whether the "your work" exclusion precluded coverage.

The ruling reinforces the understanding in Georgia that CGL policies are not performance bonds and generally do not cover the cost of repairing the insured's own defective work, providing clarity for insurers and contractors in construction risk management.