D.R. Horton-Texas Ltd. v. Markel International Insurance Co.
300 S.W.3d 740 | Texas Supreme Court | 2009
What This Case Means for Subcontractors
A homeowner sued a general contractor (D.R. Horton) for mold damage caused by construction defects, but did not name the subcontractor who performed the work. The general contractor sought defense and indemnification from the subcontractor's insurance policy. The Texas Supreme Court ruled that an insurer can owe indemnification even when it doesn't owe a defense, and that coverage depends on the facts of the injury, not just who is named in the lawsuit. This matters to subcontractors because your insurance may have to cover the general contractor's losses even if the homeowner never sued you directly.
Key Takeaways
- •Your CGL insurance can be required to indemnify a general contractor for defects you caused, even if the homeowner never named you as a defendant
- •Insurance companies cannot avoid coverage by claiming the subcontractor wasn't sued—they must look at the actual facts of what caused the damage
- •Make sure your insurance policy clearly defines what defects and repairs you're responsible for, because broad indemnification clauses can expose you to liability for work you didn't perform or defects you didn't cause
Expert testimony was legally insufficient to support the verdict.
Frequently Asked Question
If a homeowner sues the general contractor but not me, can my insurance still have to pay?
Yes. Under this Texas ruling, your insurance company must look at whether you actually caused the damage, not just whether you were named in the lawsuit. If the homeowner's damage resulted from your work, your CGL policy may have to cover the general contractor's losses even though you weren't a defendant. Review your policy's indemnification clause carefully.
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