Jeffrey Siderius recently obtained a favorable ruling from the U.S. District Court for the Northern District of Illinois in an insurance coverage dispute.  The court ruled that our client, AMCO Insurance Company, had no duty to defend or indemnify its named insured, Northern Heritage Builders, against a subrogation lawsuit filed by American Family Insurance.  American Family sued Northern Heritage, seeking recovery of $1.1 million which American Family had previously paid to homeowner Michael McGrath to settle McGrath’s construction defect claim for water damage to his home.  Northern Heritage was the general contractor for the construction of Mr. McGrath’s home.

Judge Sharon Johnson Coleman of the Northern District ruled there was no coverage under the AMCO general liability policy because the entire $1.1 million consisted of the costs of repairing and replacing Northern’s defective work, which did not constitute covered “property damage” within the meaning of the AMCO policy.  The court accordingly ruled that AMCO had no duty to defend or indemnify Northern Heritage against American Family’s subrogation lawsuit.