Texas Supreme Court Limits Insurance Exclusions

AUSTIN (January 17, 2014) The Texas Supreme Court issued a ruling Friday that should give consumers more confidence in the liability insurance coverage carried by their contractors.

Justice Phil Johnson released the decision Friday denying an insurance company's attempt to avoid paying a claim based on language found in most Commercial General Liability insurance policies.

The Court's decision was one of the most anticipated in the country and will have national repercussions, insurance law expert Randy Maniloff said.

The insurer was trying to avoid paying a claim because the contractor had entered into a contract with a client and hired a subcontractor.

The insurer said the policy excluded potential liabilities assumed by signing a contract, but Johnson wrote that because the liability would have been covered absent a contract, it could not be excluded.

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