Most contractors assume their Commercial General Liability (CGL) policy works the same way regardless of where they operate. Increasingly, that’s not the case.
Recent South Carolina court decisions have highlighted a significant difference between how South Carolina and Ohio approach long-tail construction defect and progressive damage claims. The issue centers on a concept known as successive policy-period stacking—and it can dramatically affect both insurers and contractors when claims emerge years after a project is completed.
Understanding the Problem
Construction defects often don’t reveal themselves immediately. Water intrusion, mold growth, rot, and structural deterioration may develop over several years before a property owner discovers the damage.
When that happens, a key question arises:
Which insurance policy responds?
If the damage occurred gradually over multiple years, several policy periods may potentially be involved.
The answer depends heavily on state law.
South Carolina’s Broad Trigger Approach
South Carolina courts have generally adopted a continuous trigger approach for progressive property damage claims. Under this framework, coverage can be triggered from the time damage first begins and continue through subsequent policy periods as the damage progresses. Courts have held that multiple policy years may be implicated when continuous or progressive damage occurs over time.
This creates the potential for contractors and policyholders to access coverage across multiple years of insurance rather than being limited to a single policy period.
For insurers, that means a claim arising today could potentially involve several years of historical coverage.
For contractors, it can create both opportunities and complexities when seeking defense and indemnity for construction defect claims.
Ohio Takes a More Restrained View
Ohio courts have generally taken a narrower approach to occurrence-based construction defect claims.
While Ohio coverage disputes are highly fact-specific, courts have historically been less receptive to broad continuous-trigger and stacking theories than some jurisdictions. Coverage often focuses more closely on when actual property damage occurred and the specific language of the policy involved.
As a result, contractors operating solely in Ohio may face a different insurance response than contractors performing similar work in South Carolina.
The same water intrusion claim that could potentially implicate multiple policy years in South Carolina may receive a much narrower coverage analysis in Ohio.
Why This Matters for Contractors
For contractors working in South Carolina, the stakes are significant.
A defect discovered ten years after project completion could potentially trigger multiple policy periods, creating complicated questions involving:
- Which insurer must defend the claim
- How losses are allocated among insurers
- Whether policy limits can be accessed across multiple years
- How deductibles or self-insured retentions apply
- Which state’s law governs the dispute
In addition to creating more complex coverage disputes, South Carolina’s broader approach to continuous-trigger and stacking-related coverage issues can increase insurers’ potential exposure. As a result, some carriers have tightened underwriting standards or become more cautious about writing certain contractor risks in the state. For contractors, that can translate into fewer available markets, more restrictive terms, and upward pressure on insurance premiums.
The Hidden Exposure for Growing Contractors
Many contractors headquartered in Ohio are expanding operations throughout the Southeast, including South Carolina.
What they often don’t realize is that crossing state lines may expose them to entirely different insurance interpretations years down the road.
A contractor may complete a project in Charleston, Greenville, or Columbia and assume their Ohio-based insurance program will respond predictably if a claim arises later. However, South Carolina law may ultimately influence how coverage is triggered and allocated.
This is particularly important for:
- General contractors
- Roofing contractors
- Exterior restoration contractors
- Stucco and EIFS contractors
- Concrete contractors
- Waterproofing contractors
- Multi-state construction firms
Risk Management Is More Important Than Ever
Because coverage disputes involving successive policy periods can become complex, contractors should focus on preserving documentation long after a project is completed.
Important records include:
- Certificates of insurance
- Historical policy declarations
- Contracts and indemnity agreements
- Project completion records
- Subcontractor agreements
- Additional insured endorsements
When a claim surfaces years later, locating historical coverage can become just as important as defending the underlying allegation.
The Bottom Line
The gap between South Carolina and Ohio insurance law illustrates an important reality for contractors: insurance coverage is not determined solely by what your policy says. It is also shaped by how courts interpret that policy.
South Carolina’s willingness to apply continuous-trigger principles to progressive damage claims can create broader insurance implications than many contractors expect. Ohio’s approach has generally been more limited.
For contractors operating across state lines, understanding those differences is critical. A claim involving the same construction defect may produce very different insurance outcomes depending on where the project was built and which state’s law ultimately applies.
At Haughn Insurance, we help contractors evaluate how their insurance programs respond to multi-state operations and emerging liability trends. As construction defect litigation continues to evolve, making sure your coverage keeps pace is more important than ever.
