COA Allows Suit Against County To Go Forward On One Insurance Policy, Not On Another

In Cowell v. Gaston County et al., the COA allowed the plaintiffs, home owners who attributed their uninhabitable home to negligent inspection by county building inspectors, to go to trial against the county on Tuesday.

The county had bought 2 insurance policies but claimed that neither covered plaintiffs' claims and therefore the county was immune. The COA agreed that one policy did not cover the claims. That policy plainly excluded from coverage claims for "damage to or destruction of any property, including diminution of value or use" and claims for "performance of failure to perform ... inspection or engineering services..."

However, the COA noted that where, unlike above, the language of an insurance policy is ambiguous, it is construed against the drafter, i.e., the insurer, and in favor of coverage. The county's second insurance policy excluded engineers, architects, and surveyors from professional liability. That section also used an ambiguous "you" in that exclusion section of the policy, and the county argued that the "you" was the county and covered, among others, its building inspectors. The COA noted that that interpretation left too much ambiguity as to what's covered and what's not, was "slippery," and therefore didn't exclude the plaintiffs' building inspector claims.