Michigan has joined the majority of jurisdictions in holding that a general liability policy may provide coverage for claims for property damage allegedly caused by a subcontractor's defective work. In a unanimous decision reversing the Michigan Court of Appeals, the Michigan Supreme Court held that a subcontractor's unintentional defective work was an accident and, thus, an occurrence covered under the subcontractor's commercial general liability policy.
Given the uncertainty that COVID-19 has brought to federal projects, it is imperative now more than ever that contractors preserve rights to potential claims at all turns. Fortunately, with careful reading and documentation, contractors can satisfy the government's desire for releases while preserving their claims. A recent Armed Services Board of Contract Appeals decision is yet another caution for any contractor that signs a release without preserving claims.