SULLIVAN, J.
The Indianapolis-Marion County Public Library (“Library”) seeks to hold two subcontractors and an engineer responsible for negligence in rendering their respective services during the renovation and expansion of its downtown Indianapolis library facility. In accord with the analysis of the trial court and Court of Appeals, we affirm the trial court’s dismissal of the Library’s claims of negligence against the defendants. Primarily because the Library is connected with the defendants through a network or chain of contracts in which the parties allocated their respective risks, duties, and remedies, those contracts, and not negligence law, govern the outcome of the Library’s claims.
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. . . . [T]he economic loss rule is well established in Indiana and that there are sound legal and economic justifications for it. But we emphasize before going further that the economic loss rule has limits, that while it operates as a general rule to preclude recovery in tort for economic loss, it does so only for purely economic loss – pecuniary loss unaccompanied by any property damage or personal injury (other than damage to the product or service provided by the defendant) – and even when there is purely economic loss, there are exceptions to the general rule.
These two limitations on the economic loss rule – that there (1) must be purely economic loss for it to apply and (2) are some exceptions to its application even where there is purely economic loss – provide the bases for the Library’s five arguments that the economic loss rule is in-applicable in this case and that the Library should be allowed to proceed in tort against the Defendants. The Library makes two arguments that it has not suffered purely economic loss . . . . And the Library makes three arguments that even if it has suffered purely economic loss, three exceptions apply . . . .
The Library’s principal contention is that its loss is not “pure” economic loss and thus that its tort claims against the Defendants are not precluded by the economic loss rule. Specifically, the Library maintains that the damages it suffered were (A) to “other property” and (B) physical, not commercial, and even if not physical, should be treated as such because they created an imminent risk of personal injury.
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. . . Here the product or service purchased from the Defendants was an integral part of the entire library construction project, not independent from it. Any damages alleged to have resulted from the Defendants’ negligence were to the “product” the Library purchased, not to “other property.” The economic loss rule applies.
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Contending that having to repair and reconstruct a substantial portion of the project was tantamount to suffering property damage, the Library argues that it suffered damages distinct from commercial losses such that the economic loss rule is not applicable. Had the Library suffered property damage to “other property,” the economic loss rule would not apply and the Library would be entitled to recover in tort for the pecuniary harm attributable thereto. But our resolution of the Library’s contention on “other property” in subpart A supra disposes of this contention as well. As the Court of Appeals correctly stated, “[a]lthough the repairs have a component of physical destruction, the repair and reconstruction of the garage and other portions of the project are economic losses that arose from the Library’s complaint that it did not receive the benefit of its bargain.” Indianapolis-Marion County Pub. Library, 900 N.E.2d at 812. This is also the view of many of our sister jurisdictions.
The Library further argues for a narrow construction of the economic loss rule where an imminent risk of danger implicates safety concerns for the public. Specifically, the Library argues that safety is more the concern of tort rather than breach of contract, and the proper redress for negligent design is tort. We acknowledge that in some cases, including the Library’s situation, the absence of personal harm is a matter of fortune and future events could have resulted in personal injury had the Library not acted first to remedy the hazards posed by the faulty design and construction of the library facility. However, . . .
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. . . On the facts of this case, we hold that the economic loss rule applies notwithstanding the presence of imminent risk of danger.
The Library argues that even if we conclude that it suffered purely economic loss . . . , three policy considerations dictate that its negligence claims not be precluded by the economic loss rule: (A) the Defendants are professionals; (B) the Defendants negligently misrepresented facts to the Library; and (C) the Defendants provided solely services and not a tangible product.
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We recognize that there are situations where it would be unjust not to allow plaintiffs to proceed in tort against an engineer or design professional for purely economic loss where no contract exists nor could exist between the parties. . . . [O]ur default position in Indiana is that in general, there is no liability in tort for pure economic loss caused unintentionally. But Indiana courts should recognize that the rule is a general rule and be open to appropriate exceptions, such as (for purposes of illustration only) lawyer malpractice, breach of a duty of care owed to a plaintiff by a fiduciary, breach of a duty to settle owed by a liability insurer to the insured, and negligent misstatement.
We find that none of the Library’s authority involves a major construction project owner seeking to recover in tort from engineers or design professionals with whom the project owner, though not technically in privity of contract, is connected through a network or chain of contracts among the owner, contractors and subcontractors, engineers and design professionals, and others in which they allocate their respective risks, duties, and remedies. We believe that the reasons for applying the economic loss rule to all participants in such a network or chain of contracts in a major construction project are compelling, whatever that rationale might be for not applying the economic loss rule to design professionals in other settings or contexts.
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. . . We see no reason why the Library could not – and perhaps pending collateral litigation will prove that it did – reasonably protect itself from loss by contracts with the Defendants or through an intermediary. But we need not decide this case on a principle quite so broad. We hold instead that there is no liability in tort to the owner of a major construction project for pure economic loss caused unintentionally by contractors, subcontractors, engineers, design professionals, or others engaged in the project with whom the project owner, whether or not technically in privity of contract, is connected through a network or chain of contracts. This is the Library’s situation here and the economic loss rule applies.
The Library makes a relatively brief argument that the economic loss rule should not be a bar to its claims against the Defendants because the Defendants have been guilty of providing false information to the Library. The Library invokes a number of cases from other jurisdictions that have allowed claims for purely economic loss to be maintained against engineers and design professionals who negligently misrepresent information to another. The Library correctly observes that most of these cases – including the three cited in note 16, supra – rely on Restatement (Second) of Torts § 552 (1976).
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In another case we decide today, we recognize a claim of negligent misrepresentation as an exception to the general economic loss rule where a mortgage lender not in privity of contract with a title company seeks to recover for the title company’s negligence in issuing a title commitment that failed to disclose an encumbrance. See U.S. Bank, N.A. v. Integrity Land Title Corp., – N.E.2d –, No. 17S03-1002-CV-120, slip op. (Ind. June 29, 2010). But because the Library is connected with the Defendants through a network or chain of contracts, the economic loss rule precludes it from proceeding in tort in this case.
The Library makes a very brief argument that the economic loss doctrine should not apply in situations where a defendant provides solely services and not a tangible product. . . .
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. . . [W]e return again to a point made several times in the course of this opinion: that the economic loss rule is a general rule that admits of exceptions for contracts for services in appropriate circumstances. Indeed, we have mentioned possible exceptions (for purposes of illustration only) – lawyer malpractice, breach of a duty of care owed to a plaintiff by a fiduciary, breach of a duty to settle owed by a liability insurer to the insured, and negligent misstatement – that suggest situations in which the economic loss rule would not apply in the services context.
If called upon, we might well recognize an exception to the general economic loss rule in such limited circumstances. However, the policy justifications for the economic loss rule discussed throughout this opinion amply support applying the rule to products and services alike.
We affirm the judgment of the trial court.
SHEPARD, C.J., and DICKSON, BOEHM, and RUCKER, JJ., concur.