In Admiral Ins. Co. v. H&W Industrial Services, Inc. No. EP-10-CV-273-KC (W.D. Tex. Feb. 1, 2011), insured H&W was sued by claimant Texas Department of Transportation for breach of contract and warranty seeking damages for the replacement of street signs manufactured by H&W. The complaint alleged specifically that a film placed on the signs by one of H&W’s subcontractors shrank and discolored which changed the appearance of the signs and warped the letters and numbers on the signs thereby creating a traffic safety hazard requiring replacement of the signs. H&W’s CGL insurer, Admiral, denied a defense and filed suit seeking a declaratory judgment of no duty to defend or indemnify. Admiral moved for summary judgment to which H&W failed to respond. The federal district trial court entered summary judgment for Admiral. Applying Texas law, the court held that, even assuming the underlying complaint alleged “property damage” caused by an “occurrence,” all such “property damage” fell within exclusions. The court first held that the alleged costs to remove and replace the signs fell within the “Damage to Your Product” which applied to damage to H&W’s product “arising out of it or any part of it.” The court then held that the alleged costs to store the defective signs after they had been replaced, to the extent they would constitute damages for loss of use of property not physically injured, fell within the “impaired property” exclusion.