The trial court's finding of no occurrence and no property damage due to faulty workmanship was reversed by the appellate court. No. 5 Walworth v. Engerman Contracting, Inc., 2021 Wis. App. LEXIS 401 (Wis. Ct. App, July 30, 2021).      Engerman was the general contractor on a construction project at a residence. Engerman was hired to build a poll complex. Engerman subcontracted the project to Downes Swimming Pool Co., Inc. Downes purchased shotcrete (sprayed concrete) from Otto Jacobs Company LLC for the swimming poll walls and base.     After completion, the pool immediately began leaking. An investigation determined that the shotcrete material was not installed correctly, contributing to cracking in the pool walls and the steel reinforcing bars were not sufficient to prevent cracks in the pool walls. The owner demolished the pool and constructed a new one. Thereafter, the owner sued Engerman, its insurers (General Casualty Company of Wisconsin and West Bend Mutual Insurance Company) and Downes and its insurer. Downes filed a third-party complaint against Jacobs and its insurer (Acuity Mutual Insurance Company) alleging Jacobs negligently provided inferior shotcrete to Downes.      Engerman and Jacobs tendered to their respective insurers and were defended under a reservation of rights. Each insurer then brought a motion for summary and declaratory judgment that there was no coverage under their policies. The court granted the motion against Engerman, finding there was no occurrence and no property damage because there was no damage to property other than the pool itself. The court also granted Acuity's motion against Jacobs, finding the shotcrete was part of an integrated system - the pool structure.      On appeal, the Court of Appeals first considered whether Engerman could be found entitled to coverage. Engerman's case for coverage was based on its potential liability for the actions of its subcontractor, Downes, in allegedly building a pool with ineffective steel reinforcing bars, improperly installed shotcrete, and/or suboptimal shotcrete mixture. American Girl, however, made clear that defective workmanship may cause an occurrence (i.e., an accident), resulting in property damage. Am. Family Mut. Ins. Co. v. Am. Girl, Inc. 673 N.W. 2d 65 (Wis. 2004). There was evidence that Engerman, acting through its subcontractor, Downes, incorrectly installed shotcrete and used insufficient steel reinforcing brs. If coverage was sought for the costs of repairing or replacing the incorrectly install materials, controlling precent would hold that there was no "occurrence," and no coverage. In this case, however, there was evidence suggesting that the defective workmanship caused the pool walls to later crack and, in turn, the pool to leak. The cracking, which stemmed from the defective workmanship was not intended and was both an "accident" and a form of property damage. Consequently, there was the possibility of coverage.      The court next considered potential business risk exclusions. Under the "your work" exclusion, coverage was barred for the repair or replacement of the insured's work. But an exception existed for work preformed by a subcontractor. Here, all of the defective work alleged to have been performed by Engerman was performed by Downes, Engerman's subcontractor. Thus, the "your work" exclusion did not apply.     Similarly, the "damage to property" exclusion, which barred coverage for "that particular part of any property that must be restored, repaired or replaced because 'your work' was incorrectly performed on it," did not apply. The exclusion also contained an exception for "'property damage' included in the 'products-complete operations hazard.'" The "products-completed operations hazard" meant the point in time at which the work was completed. In other words, where the pool was fully installed, the "damage to property" exclusion did not apply to damage that occurred from that point forward.      The "your work" exclusion was almost certainly inapplicable, assuming liability was based on the work of Downes as a subcontractor. As for the "damage to property" exclusion, at this stage, the court could not rule out the possibility that the pool was complete when the damage occurred, and if that was the case, the exclusion was also inapplicable.      Turning to Acuity's motion against Jacobs (who provided the shotcrete), property damage caused by a defective product could be considered as caused by an "accident." Product manufacturers purchased CGL coverage to guard agains this very risk, and to hold otherwise would essentially eliminate coverage altogether for cases involving defective products. Here, there was more than simply a pool rendered unusable without physical injury to property. There was at least some proof that the allegedly defective shotcrete did cause such injury. It was alleged that the product was defective, and that, upon its application, it caused damage to the pool structure through cracking and leaking. This led to leaks and cracks in the retaining walls stemming from the instability of the surrounding soil, which eventually necessitated demolition of the entire structure. Only if the entire pool complex was somehow considered part of the shotcrete could this be considered a case where Jacobs' product alone was damaged. This was not a logical conclusion to draw from the terms of the policy. Physical injury to other property that resulted from defective products was exactly what commercial liability insurance was designed to cover.     Accordingly, the orders below were reversed and the case was remanded.

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