A West Virginia appeals court has upended insurer defenses in a major construction defect case, spotlighting coverage duties and notice requirements for commercial liability carriers.
On November 13, 2025, the Intermediate Court of Appeals of West Virginia reversed key parts of a lower court’s ruling in a dispute between G&G Builders, Inc. and two insurers: Central Mutual Insurance Company and Builders Premier Mutual Insurance Company.
The case began with a residential construction project in Milton, West Virginia, where G&G Builders served as general contractor. After the homeowners alleged a series of construction defects – cracked stonework, leaky windows, and more – G&G turned to its subcontractors’ insurers for coverage under commercial general liability policies that named G&G as an additional insured.
Securing coverage, however, was anything but simple. The insurers disputed their obligations, citing policy clauses that required claims to be reported “as soon as practicable.” Sorting out which subcontractor was responsible for each alleged defect required years of discovery and negotiation. Ultimately, the homeowners settled for $1.425 million, with most of the payment coming from Cincinnati Insurance and $100,000 from Central Mutual. G&G also agreed to release $250,000 of its mechanic’s lien as part of the settlement.
Despite these settlements, the trial court sided with the insurers, ruling that G&G wasn’t entitled to damages for breach of contract or bad faith because it had been defended and indemnified at no cost. The court relied on a prior West Virginia Supreme Court case, Soaring Eagle, which held that insureds can’t pursue such claims if they’ve been fully covered.
G&G appealed, arguing that its situation was different. Unlike in Soaring Eagle, G&G had to contribute to the settlement and only received coverage after taking the insurers to court. The appeals court agreed, finding that the lower court overlooked these key differences. The judges noted that G&G’s settlement contribution and the need to litigate for coverage meant the company was not “fully indemnified at no cost.” The court also ruled that it’s up to a jury – not a judge – to decide if G&G provided reasonable notice of the claims.
The decision sends the case back to the lower court for further proceedings, including a closer look at whether notice was timely and the significance of G&G’s settlement contributions. For insurance professionals, the ruling is a clear reminder: policy language, claims handling, and timely communication matter. Courts may not let insurers off the hook simply because another party paid out.
This case stands out for its focus on business-to-business insurance relationships and the practical realities of coverage disputes in the construction sector. With millions of dollars at stake and a fresh look at insurer obligations, the November 13 decision is one to watch for anyone working in commercial liability or construction insurance.
