United States Court of Appeals for the Sixth Circuit defined "subcontractor" under a "your-work" exclusionary provision where the applicable policy failed to provide a definition.

A commercial general liability insurance policy included a "your-work exclusion," which excluded coverage for damage to "your work" after the work has been completed, unless it was performed by a subcontractor. Because the policy did not define "subcontractor," and neither did Ohio law at least not in this context, the court looked to other jurisdictions. The court found that to be considered a "subcontractor" under a "your-work exclusion," a material supplier who does not perform work at the site must manufacture the materials according to specifications of the general contractor. The materials contract must incorporate terms from the master contract or otherwise indicate the materials at issue are manufactured for the master contract's project.

Case Law Alert - 4th Qtr 2011