In 2021, a window supplier sued for coverage under an OCIP policy to recover the $2.5 million it paid to replace more than 2,000 windows at a condo tower in San Diego, California. The underlying window claims concerned dripping sealant, which created visual obstructions. It was undisputed that the sealant only damaged the windows themselves and that faulty installation did not cause the sealant to drip. 
 
On motion for summary judgment, we argued no coverage existed under the OCIP policy, which included standard CGL coverage, because there was no covered “property damage.” In granting summary judgment, the court agreed there was no covered “property damage” because the dripping sealant only damaged the windows and not any third-party property. It further reasoned that the failure of a product to perform as expected is not “property damage” under California law, nor is “property damage” established by pure economic loss (e.g., diminution in value). The court also rejected the supplier’s argument that an OCIP endorsement restored coverage on the basis that the windows were fixtures. It agreed with our analysis that holding otherwise “would magically turn the OCIP policy from a liability policy to a performance bond or warranty of the entire building.”
 
This ruling is an important reaffirmation of long-standing California precedent that faulty workmanship and/or defective material that does not cause third-party resultant damage does not constitute “property damage” under the standard definition of that term in liability policies.