An Insurer’s Duty to Defend Arose From Common Law Claim

The Arizona Supreme Court last month held that an insurance company had a duty to defend a homeowner who was sued by the new owner of a Paradise Valley mountainside home after it was damaged by a rock slide.

In Teufel v. American Family Mutual Insurance Co., the Court found that a provisions of the insurance policy that excluded liability claims arising under a contract did not apply because the new owner had alleged a negligence claim arising under tort, not contract.

The court used its decisions to affirm its comments in a 1984 decision that, irrespective of contractual claims, a builder-vendor or contractor owes a common law duty of care in addition to any contractual duties.

By William Horne

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Posted in: Business Law

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