In construction defect claims, various insurance policies are often implicated. In Florida, there are multiple triggers for determining whether property damage occurs during a policy period. One trigger is manifestation (which commences from the date of discovery or the date a reasonable inspection would show discovery of the damage) and another trigger is injury-in-fact (the property is blatantly damaged). Under the injury-in-fact, the main inquiry is the date of the property damage. If the date of the damage is during the policy period, then the policy is applicable. Under the manifestation, the applicable policy is the one in place at the time of the discovery of the property damage. In Carithers v. Mid-Continent Casualty Company, the Florida federal appellate court held that injury-in-fact, not manifestation that determined the applicable insurance policy.
In Carithers, the homeowner filed suit for construction defects associated with their house and alleged the defects could not have been discovered until 2010. The general contractor’s insurance company’s policy lasted until 2008. Therefore, the insurance company provided a defense that they had no duty under the policy when the homeowner’s damage was apparent in 2010.
The Eleventh Circuit Court of Appeals concurred with the district court that injury-in-fact was applicable, not manifestation as the Insurance had argued that manifestation was appropriate. The Court examined the applicable insurance policy and found that the plain language of the insurance policy stated that property damage occurs when the damage happens, not when it is discovered or discoverable. However, the court, limited it’s holding to the facts of this case and did not rule on which trigger applies where it is hard to determine when the property was damaged. This case demonstrates that insurance policy’s language is central to the determination of when the damage commenced. The key for determining insurance coverage will be the language of the insurance policy and determining when the damage occurred. If the policy language mirrors that of Carithers, and the damage date can be ascertained, the likely trigger will be injury-in-fact and not manifestation.