A question that gains more importance when litigation and defects are involved―especially with window and door claims. A recent decision from the District Court for Kansas shows just how complicated this important question can become.
Some quick background: Employers Mutual Casualty Company v. Knipp Equipment involved an attempt by Edwards County, Kansas, to recover damages from Knipp Equipment due to alleged defects with the installation of windows and doors in the Edwards County courthouse. After a long arbitration process there was a finding that Knipp Equipment was responsible for the installation issues and had to pay roughly $420,000 to the County.
Before the project, Knipp Equipment had purchased an insurance policy from Employers Mutual Casualty Co. to protect its business. The insurance policy was a relatively standard General Liability policy that obligated the insurer to defend claims and pay for property damages due to an accident, as defined by the policy’s terms. And, while the insurance company defended the County’s claim of problems with the courthouse window replacement, it refused to pay the arbitration award.
The insurance company’s refusal to pay the award was based on the position that the work of Knipp Equipment on the site, and alleged defects during installation of the windows, was not an accident that would trigger coverage under the policy. It took this position based on certain findings by the arbitrator: namely, that Knipp had, without consulting the architect on the job, changed how the windows would be installed, failed to use proper materials, and did not perform in a workmanlike manner. In the face of those finding, Knipp’s insurance carrier argues that these acts were “intentional decisions to subvert the architecture firm, which would lead any reasonably prudent construction company to expect leaking windows.”
Knipp Equipment objected to that position, obviously. Through a series of separate legal dealings, Knipp Equipment and the County entered into an agreement by which the County acquired Knipp’s rights under the policy and sued the insurance company. The County brought its claim to seek recovery from the insurer of the $420,000 award and to do so, it argued that the insurance company’s reliance on the arbitrator’s findings was flawed.
The United States District Court for Kansas disagreed. In early 2025 the Court granted a motion filed by the insurance carrier, finding there was no claim triggering the insurance coverage―effectively leaving Knipp Equipment with the obligation to pay the County. In its order the Court correctly noted that the burden to prove an insurance policy covers a claim must be met by the person who seeks relief from the policy. Here, the Court found that because the arbitrator’s findings were that the actions and decision of Knipp’s Equipment were not accidental, the policy was not triggered and therefore would not cover the claim or be responsible for the award: “Although Knipp may have not intended to cause this specific harm, its subversion of the architecture firm was certainly not accidental. Because the window damage was not accidental, it was neither the result of an occurrence [as defined by the policy].”
The damages sought by the County also did not help establish coverage. The County’s claim and disclosed grounds for recovery all centered on the replacement cost of the window products. These kinds of damages are typically excluded from General Liability insurance policies because they compensate for defective work, which is not an accident under the policy. While General Liability policies often pay for property damage or harm caused by defective work, such was not alleged by the County, so the Court had an easy time of resolving the damages issue in favor of the insurance company.
The Knipp’s Equipment case helps illustrate how the question of Who Pays can become very complicated when insurance policies and various claims of damages are asserted. And while no one wants to be involved in a dispute of this kind, having effective guidance before and during claims can help manage not only the claim, but responsibility for payment of any award.