RUCKER, J.
. . . The main issue in this case is whether a standard commercial general liability (“CGL”) insurance policy covers an insured contractor for the faulty workmanship of its subcontractor.
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Because this action is based upon an underlying claim filed in November 2004, we begin by tracing the history of the original action. In April 2000 Vincent B. Alig and his wife Mary Jean Alig purchased a home in the Crystal Lake residential subdivision located in Marion County. Sheehan Construction Company was the general contractor on the project and was responsible for hiring subcontractors who actually built the houses. After experiencing water leaks in their home, the Aligs notified their homeowner’s insurance carrier which in turn hired an engineering company to investigate. Among other things the investigation revealed leaking windows, fungus growth on the siding, decayed OSB sheathing, deteriorating and decaying floor joists, and water damage to the interior of the home including water stained carpeting. . . . These problems were caused by the faulty workmanship of Sheehan’s subcontractors which included lack of adequate flashing and quality caulking around the windows, lack of a weather resistant barrier behind the brick veneer to protect the wood components of the wall, improperly installed roofing shingles, improperly flashed or sealed openings for the chimney and vents, and inadequate ventilation in the crawl space. . . . .
. . . . The policies provided coverage for the “sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ . . . . caused by an ‘occurrence’ that takes place in the ‘coverage territory’” during the policy period. . . . As defined in the policies, an “occurrence” is “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” and “property damage” includes “[p]hysical injury to tangible property, including all resulting loss of use of that property.” . . . The coverage provisions were limited by numerous exclusions. Of particular relevance in this case is the exclusion, with its exception, that excludes coverage for damage to the insured’s property and work:
2. Exclusions.
This insurance does not apply to:
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l. Damage To Your Work
“Property damage” to “your work” arising out of it or any part of it and included in the “products-completed operations hazard”.
This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.
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The Insurers’ CGL policies insure against liability for “property damage” caused by an “occurrence.” . . . The policies follow the widely used CGL form defining “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” . . . Whether faulty workmanship fits within the insurance policy’s definition of “occurrence” under standard CGL polices has been the subject of much debate and litigation throughout the country and the jurisdictions are divided on the issue. Some states have held that faulty workmanship or improper construction is not an “occurrence” because it does not constitute an “accident.” [Footnote omitted.] Other states have found improper or faulty construction to be an “accident” and therefore an “occurrence” where the resulting damage occurs without the insured‟s expectation or foresight. [Footnote omitted.] Many of these cited cases are discussed in numerous articles advancing both sides of the issue. . . . .
. . . [W]e align ourselves with those jurisdictions adopting the view that improper or faulty workmanship does constitute an accident so long as the resulting damage is an event that occurs without expectation or foresight. As explained in more detail below this rationale is consistent with this jurisdiction’s definition of “accident” as contained in standard CGL policies.
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. . . [T]his Court has defined accident to mean “an unexpected happening without an intention or design.” Tri-Etch, Inc., v. Cincinnati Ins. Co., 909 N.E.2d 997, 1002 (Ind. 2009) (quoting Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279, 1283 (Ind. 2006)). Implicit in the meaning of “accident” is the lack of intentionality. Id. The question presented is whether faulty workmanship is an accident within the meaning of a standard CGL policy. In our view the answer depends on the facts of the case. For example, faulty workmanship that is intentional from the viewpoint of the insured cannot be an “accident” or an “occurrence.” See Lamar Homes, 242 S.W.3d at 8-9. On the other hand if the faulty workmanship is “unexpected” and “without intention or design” and thus not foreseeable from the viewpoint of the insured, then it is an accident within the meaning of a CGL policy. The following example illustrates the point.
[I]f a contractor improperly installs a shingle that later falls and hits a passerby, this event is unforeseeable and is an “occurrence” or “accident.” . . . A shingle falling and injuring a person is a natural consequence of an improperly installed shingle just as water damage is a natural consequence of an improperly installed window. If we assume that either the shingle or the window installation will be completed negligently, it is foreseeable that damages will result. If, however, we assume that the installation of both the shingle and the window will be completed properly, then neither the falling shingle nor the water penetration is foreseeable and both events are “accidents.”
Travelers Indem., 216 S.W.3d at 309. As applied to the case before us, if the faulty workmanship was the product of unintentional conduct then we start with the assumption, from Sheehan’s viewpoint, that the work on the Class members‟ homes would be completed properly. The resulting damage would therefore be unforeseeable and constitute an “accident” and therefore an “occurrence” within the meaning of the Insurers‟ CGL policies.
For an additional reason we find support for our conclusion that “accident” within the meaning of the CGL policies at issue in this case includes faulty workmanship. Although exclusionary clauses “do not grant or enlarge coverage,” DeZutti, 408 N.E.2d at 1278, contract construction principles instruct us to read the pertinent provisions of insurance policies together. See Id. (“The property damages covered can only be determined by resort to the contract as a whole, including all exclusionary provisions.”). As previously noted, the faulty workmanship on the Class members’ homes was performed by subcontractors that Sheehan – the general contractor – hired to do the work. The CGL policies include an exclusion for damage to “your work” and then narrow the exclusion by expressly declaring that it does not apply “if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.” . . . If the insuring provisions do not confer an initial grant of coverage, then there would be no reasons for a “your work” exclusion. . . . .
In this case the trial court entered summary judgment in favor of Insurers on grounds that there was no damage to property “other than to the structural components of the homes themselves” and thus there was no “occurrence” or “property damage.” . . . On this point the trial court erred. As we have explained faulty workmanship may constitute an accident and thus an occurrence depending on the facts. More specifically, if the defective work of the subcontractors were done intentionally instead of “without intention or design”, then it is not an accident. Otherwise the opposite is true. Here, none of the parties‟ Trial Rule 56 materials address the question of whether the faulty workmanship was the product of intentional versus unintentional conduct. And accordingly the trial court reached no conclusion on this point.
Dickson and Boehm, JJ., concur.
SHEPARD, C.J., dissents with separate opinion:
To make a long story short, I think these policies are neither designed nor priced as coverage for whatever demands the insured may face in the nature of ordinary consumer claims about breach of warranty. Inquiry during oral argument suggested that there may not even exist in the marketplace an insurance product that “covers me when I don’t do a very good job,” if you will.
As the majority recognizes, there is in the country a divide in the case law on the point we decide today. I would put us on the other side of this divide.
SULLIVAN, J., dissents with separate opinion in which Shepard, C.J., joins:
My review of the authorities convinces me that an “occurrence” under a CGL policy in the context of these cases is accidental damage caused by an insured (or an insured‟s subcontractors) to property owned by third parties, but not the costs of repairing defective work performed by an insured (or an insured’s subcontractors).