"The contractor takes on a project for a fixed price to install a tub/toilet/sink, etc. that are supplied by the buyer. By doing so, the contractor assumes risk of damaging material. Any contractor that does not factor in a contingency for possibly causing material damage is making a mistake. "
You think it's a simple open and shut case that the contractor "caused" the damage. How does anyone know this? To start with, you've only heard one side of this story. Second, when working with natural materials, I've seen stuff that looked fine to start with, but turned out to be less than satisfactory. Haven't you seen a piece of lumber unexpectedly split on you? Would that be a carpenter's fault for causing damage and should he pay for it, even though he didn't provide the wood? I would say it is something that can be reasonably expected to happen on occasion and it's not the carpenter's responsibility to pay for. To lay the blame on the carpenterr, you would have to prove that he was in some way negligent.
In the case of the granite, you are jumping to conclusions. No one knows what kind of granite this homeowner bought, where they got it, etc. The vast majority of people buying material somewhere and then having someone else install it are doing it because they want to save money. So, who knows what kind of crap they bought or where they got it. Granite is common enough and there are enough local vendors that would do the whole job, that it's very likely saving bucks was the motive here too.
Here's a story of a contractor allegedly causing damage. My father was a welding contractor. On large diameter water wells, like for municipalities, instead of screwing lengths together, they butt them together and weld them as they go in the ground. On a job many years ago, after they had gone down several hundred feet, the pipe already in the ground broke. The well driller blamed my father because he welded the pipe together and was going to sue.
My father contacted Marquette, who made the welding rods he used. They flew in two engineers to take samples of the pipe which were sent to their lab for analysis. Their metalurgist's conclusion left no doubt. The welds were perfect. The pipe on the other hand was made of cheap crap import steel that was brittle and unfit for the purpose. Confronted with that, the well driller folded up his tent. Following your logic, my father would be the one clearly to blame though, because he "damaged" it.