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Putting the Genie Back in the Bottle: Fifth Circuit Finds Breach of Express Warranty to Repair Not Excluded by the ?Ç£Contractual Liability?Ç¥ Exclusion

The Fifth Circuit Court of Appeals has held in Crownover v. Mid-Continent Casualty Company?áthat a contractor?ÇÖs breach of an express warranty to repair does not constitute an ?Ç£assumption of liability in a contract or agreement?Ç¥ for purposes of the ?Ç£contractual liability?Ç¥ exclusion found in most general liability policies. Once upon a time, insurers, insureds and courts understood that the ?Ç£contractual liability?Ç¥ exclusion, which applies to damages the insured is obligated to pay by reason of the ?Ç£assumption of liability in a contract or agreement,?Ç¥ is triggered only ?Ç£when the insured assumes responsibility for the conduct of a third-party?Ç¥ in an indemnity or hold-harmless agreement.[1]?á In Gilbert?áin 2010 and in Ewing?áin January of this year, the Texas Supreme Court adopted a new legal construct: ?Ç£?Çÿassumption of liability?ÇÖ means that the insured has assumed a liability for damages that exceeds the liability it would have under general law.?Ç¥[2] Since this new standard… Continue Reading

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