West Virginia Intermediate Court of Appeals

Case no.: 25-ICA-164
Date filed: February 3, 2026

A West Virginia appeals court has ruled that the work of subcontractors was not covered under a Commercial General Liability (CGL) insurance policy. An endorsement to the policy required written subcontracts and proof of subcontractor insurance.

Tiffany Mullins entered into two written contracts with DG Home Repair for repairs to her flood-damaged home in Charleston. Mullins alleged Donnie Goodwin, the sole proprietor of DG Home Repair, had represented himself as a licensed contractor.

Most of the work on Mullins’s home was performed by two individuals: Arlie Richards and Ethan Goodwin, a nephew of Donnie Goodwin. Mullins paid Donnie Goodwin more than $70,000 for this work, which she later alleged to be unworkmanlike and defective.

Mullins later sued NEXT Insurance Inc. under a CGL insurance policy NEXT had issued to DG Home Repair. The policy expressly excluded coverage for “property damage” to “your work” but said the exclusion did not apply to damage arising from performance “on your behalf by a subcontractor.”

There was an endorsement to the standard policy entitled Contractor/SubContractor Insurance Requirements. This endorsement stated that notwithstanding any other provision of the insurance policy, coverage for subcontracted work would apply only if that work had been performed under a written subcontract agreement and the subcontractor had provided a certificate of insurance reflecting CGL coverage with limits equal to or exceeding the limits of this policy.

The Circuit Court of Kanawha County granted summary judgment in favor of Mullins. The court ruled that the CGL policy created a “reasonable expectation” of insurance coverage for subcontracted work. NEXT insurance appealed. Arlie Richards and Ethan Goodwin had both provided statements—Richards in a deposition and Goodwin in an affidavit—describing their relationship with DG Home Repair. Both said they did not consider themselves employees of the company. Neither had a written agreement with the company. Donnie Goodwin paid them in cash each week.

The West Virginia Intermediate Court of Appeals said the “reasonable expectation” of coverage doctrine applied only when an insurance policy was ambiguous. The circuit court had not ruled that this CGL policy was ambiguous, and the appellate court ruled that it was not.

“The Policy’s Subcontractor Requirements form plainly states that it modifies insurance provided under the CGL Coverage Part, and ‘[n]otwithstanding any other provision in this Coverage Part[,]’ coverage does not apply to an ‘occurrence’ arising out of a subcontractor’s work unless two conditions precedent are satisfied. Those conditions are that the subcontractor 1) is operating pursuant to a written agreement between the insured and the subcontractor; and 2) provided the insured with a valid certificate of insurance listing the insured as an additional insured on their CGL Policy with limits equal to or exceeding the limits under the Policy.”

“We find no ambiguity in the language of the Policy’s Subcontractor Requirements form and, therefore, no justification for the circuit court to consider or examine the reasonable expectations of the insured.”

The appellate court reversed the summary judgment in favor of Mullins and remanded the matter to the circuit court with orders to grant summary judgment in favor of NEXT Insurance on this matter.

The list of problems created by “informal” subcontracting practices is long. Compromised insurance coverage is certainly one.

Participants:
For NEXT Insurance: Trevor K. Taylor, Morgantown, WV
For Ms. Mullins: Charles M. Love, IV, Charleston, WV

Before: Judges Greear, Lorensen, and White

Opinion by: Memorandum opinion of the full court

Outcome: Reversed and remanded

Source: Please click here to read the complete opinion.