National Housing Building Corporation v. Acordia of Virginia Insurance Agency, Inc., 267 Va. 247

Summary

The Supreme Court of Virginia held that a contractor could not recover remediation expenses from an insurance agency for negligently failing to name the contractor as an insured on a builders risk policy. The court concluded that the policy excluded losses caused by defective design and that no covered physical loss occurred because the anticipated damage to other property never materialized. The trial court's grant of the agency's motion to strike was affirmed.

Holdings

1. The policy did not cover NHBC's remediation expenses because they arose from defective design and no covered property sustained a loss.
2. The policy's duty-to-mitigate provision did not create a right to reimbursement where no loss to covered property occurred and the claimed loss resulted from a noncovered cause.
3. NHBC could not recover the remediation expenses in contract or tort because Acordia's negligence was not a proximate cause of losses that were not covered by the policy.

Questions Presented

1. Whether NHBC could recover remediation expenses from Acordia when the builders risk policy would not have covered those expenses even if NHBC had been named as an insured.
2. Whether the policy's mitigation provision created coverage for expenses incurred to prevent potential damage when no covered property had suffered a loss.
3. Whether NHBC could recover the remediation expenses under a common-law duty to mitigate damages despite the absence of liability under the insurance policy.

Disposition

affirmed