Tortious Basis Required for “Accident” Under CGL Policies: Twigg v. Admiral Insurance Co.

Introduction

Twigg v. Admiral Insurance Company is a 2025 decision of the Supreme Court of Oregon that clarifies when a commercial general liability (“CGL”) policy’s requirement of an “occurrence” (defined as an “accident”) is met. The case arises out of home‐building defects and a subsequent settlement agreement, under which the contractor, Rainier Pacific Development LLC, attempted to correct a sloped and cracked garage floor with a concrete overlay (the “Ardex”). When plaintiffs Weston and Carrie Twigg re‐initiated arbitration, they prevailed on grounds of faulty workmanship. After an award of contractual damages, the Twiggs sued Admiral Insurance, which denied coverage on the ground that no “accident”—and hence no “occurrence”—had caused the damage. The trial court and Court of Appeals agreed, relying on this court’s earlier Oak Crest decision. On review, the Supreme Court reversed.

Summary of the Judgment

By a unanimous opinion authored by Justice DeHoog, the Supreme Court held that:

An insured’s liability arises from an “accident” under a CGL policy if there is a factual basis for tort liability—i.e., breach of a duty imposed by law—rather than solely breach of contractual obligations.
It is not necessary that the insured have pleaded or obtained a tort judgment; what matters is that the record would support imposition of tort liability for the property damage.
Defendant Admiral was not entitled to summary judgment because there remained genuine issues of material fact as to whether faulty installation of the Ardex overlay breached a tort duty of care.

The court reversed both the trial court’s summary‐judgment order and the Court of Appeals’ affirmance, and remanded for further proceedings.

Analysis

1. Precedents Cited

Hoffman Construction Co. v. Fred S. James & Co. (1992): Established a three‐step framework for interpreting ambiguous insurance policy terms—(1) express definition; (2) “plain meaning” inquiry; (3) analysis of particular and broader context, with any remaining doubt against the insurer.
McCormick & Baxter Creosoting v. St. Paul Fire & Marine (1996): Defined “accident” in a pollution exclusion context as an “incident or occurrence that happened by chance, without design and contrary to intention and expectation.”
Kisle v. St. Paul Fire & Marine (1972): Held that “accident” in a CGL policy has a “tortious connotation” and does not cover damages “solely caused by failure to perform a contract,” though negligent performance of a contract may trigger tort liability.
Oak Crest Construction Co. v. Austin Mutual Ins. Co. (2000): Applied Kisle to reject coverage where the insured’s only liability was for breach of contract in correcting a subcontractor’s defective paint work. The court conducted a record review for any evidence of tortious duty.
Fazzolari v. Portland School District (1987) and Abraham v. T. Henry Construction (2011): Reaffirmed that construction defects resulting in physical damage can support tort claims for negligent workmanship, even between contracting parties, where a duty of reasonable care exists independent of the contract terms.

2. Legal Reasoning

Applying the Hoffman framework, the court reasoned:

Express Definition. The policy defines “occurrence” only as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” “Accident” itself is undefined.
Plain Meaning. A dictionary review shows “accident” is susceptible to multiple meanings—both a purely unintended event and an unexpected event giving rise to legal relief. Insurance jurisprudence—especially Kisle and Oak Crest—has given “accident” a tort‐based meaning in the CGL context.
Contextual Analysis.
- The particular context—the policy’s “occurrence” definition and the “including” clause—does not resolve whether formal tort pleading is required.
- The broader context—Coverage A’s promise to pay sums “legally obligated to pay as damages because of … property damage”—is circular and ambiguous as to contract vs. tort liability.
Because multiple reasonable interpretations remained, the court applied the contra‐proferentem rule, construing the ambiguity against the insurer.

The court held that an underlying tort basis—i.e., a factual foundation for breach of a duty imposed by law—is required for an “accident,” but formal tort pleading or adjudication is not. Applying this principle to the summary judgment record, the court found genuine factual disputes about whether the contractor and its subcontractor negligently breached a legal duty to follow the Ardex manufacturer’s instructions, causing cracks and voids. Those disputes precluded summary judgment for Admiral.

3. Impact

Clarifies “Occurrence” in CGL Policies. Insureds need not have litigated a tort cause of action so long as there is factual evidence to support tort liability for accidental property damage.
Reaffirms Tort Remedies for Construction Defects. Builders and subcontractors can face both contract and tort claims for faulty workmanship, and insurers must evaluate coverage on the factual basis for tort duties.
Limits Mechanical Reliance on Pleadings. Courts must examine the record to see if tort duties were breached; they cannot deny coverage simply because the underlying suit was styled as contract only.
Guidance for Insurers and Contractors. Underwriters and policyholders should appreciate that “accident” coverage turns on whether unintended damage breached a noncontractual duty, even in disputes arising from a settlement or repair agreement.

Complex Concepts Simplified

“Occurrence” vs. “Accident.” In CGL policies, “occurrence” means an “accident.” Here, “accident” does not mean “purely unexpected,” but rather unintended harm that triggers tort liability.
Contractual vs. Tort Duty. A contractor always owes duties under its contract. If the same facts also violate a general legal duty of reasonable care, tort liability can arise—even between the contractor and its customer.
Summary Judgment Standard. On summary judgment, all evidence and reasonable inferences are viewed in the light most favorable to the nonmoving party (the Twiggs). If reasonable fact disputes remain—here, about negligence—summary judgment must be denied.
Contra-Proferentem. When an insurance policy term remains ambiguous after interpretation, it is construed against the insurer who drafted it.

Conclusion

Twigg v. Admiral Insurance Company refines the meaning of an “occurrence” in CGL policies by requiring only a factual basis for tort liability, not a formal tort suit or judgment. The decision preserves tort remedies for construction defects—regardless of how the dispute is styled—and underscores that insurers must look beyond contract labels to determine whether unintended property damage stemmed from a breach of a legal duty of care. Insurers and policyholders will now have clearer guidance on when “accidental” coverage applies to repair and construction defect claims.