Texas Rules Incorporation of Defective Products Is Not Physical Injury, But “Rip and Tear” Damages are Covered

In a recent landmark decision, the Texas Supreme Court held that mere incorporation of defective products into a structure without additional property damage is not covered under a commercial general liability policy. However, “rip and tear” or “get to” damages are covered.

In United States Metals, Inc. v. Liberty Mut. Group, Inc., the damages reported were not caused by the installation of a defective product, but by its removal and replacement. The Court assessed whether these damages were covered under the policy, or were barred by exclusion.

In a significant victory for policyholders, the Court found that the repair necessitated injury to tangible property and the injury was unquestionably physical. Thus, repair costs and damages for downtime were “property damage” covered by the policy.

Although the Court held that incorporation of a defective product into a structure is not physical injury, its finding of coverage for “rip and tear” damages will now be a critical tool in a Texas policyholder’s toolkit for securing coverage.

Click here to read the entire Case Alert.


Jan 12, 2016
Phillip A. Perez

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