Archives: Exclusions

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Vacancy Exclusion: Eleventh Circuit (Florida) Weighs In On “Dwelling Being Constructed” Exception

Vacancy exclusions are commonplace in many homeowner policies, and typically exclude coverage for certain types of losses if the home is vacant and/or unoccupied. Litigation involving vacancy exclusions can arise when terms in the provision are not defined and an insured claims the terms are ambiguous. In Jarvis v. GeoVera Specialty Ins. Co., 2018 U.S. … Continue Reading

Texas Federal Court Holds Faulty Workmanship Exclusion Applies to All Damage Caused By Drilling Gear Malfunction, Rejects Insured’s Claim for Covered “Resulting Loss”

When does an excluded loss end and a covered “resulting loss” begin?  This thorny question was the subject of a recent decision out of the Southern District of Texas, EMS USA, Inc. v. The Travelers Lloyds Insurance Co.,  No. H-16-1443, 2018 U.S. Dist. LEXIS 54509 (S.D. Tex. Feb. 28, 2018),  adopted by EMS, USA, Inc. … Continue Reading

The Protective Safeguards—Heat Maintained Endorsement Means What it Says: Eastern District of New York Grants Summary Judgment For Loss From Frozen Pipes

Typical first party property policies include provisions that address failure to maintain heat as excluded losses. The Eastern District of New York recently analyzed a specific endorsement requiring that heat be maintained at a particular temperature. In Read Prop. Group LLC v. Hamilton Ins. Co., No. 16-4573, 2018 U.S. Dist. LEXIS 54734 (E.D.N.Y. Mar. 30, 2018), … Continue Reading

The Water Exclusion: New York’s Fourth Department Interprets The Definition of Surface Water

The “Water Damage” exclusion incorporated in many property insurance policies is the subject of much litigation, including the scope and applicability of the “surface water” exclusion to various water damage scenarios. The New York Appellate Division, Fourth Department recently interpreted the application of the “surface water” exclusion where the source of water was not from … Continue Reading

Freezing Exclusion: Third Circuit Affirms District Court’s Grant Of Summary Judgment To Insurer

Many typical homeowner’s insurance policies contain an exclusion for damages as a result of freezing unless the homeowner uses “reasonable care” to maintain heat in the home. While this can be a fact-specific inquiry, the Third Circuit, applying Pennsylvania law, recently upheld a district court’s grant of summary judgment to an insurer, finding no issue … Continue Reading

Eastern District of New York Upholds Flood Exclusion in Superstorm Sandy Case

Nearly five years after Superstorm Sandy, some consistent themes are beginning to emerge from the increasingly robust body of property coverage case law related to the storm. A recent decision from the Eastern District of New York addresses a topic that this Blog has covered before – the application of flood exclusions in traditional open … Continue Reading

District of Connecticut Reaffirms That Definition Of “Collapse” Is Unambiguous

The United States District Court for the District of Connecticut recently reaffirmed its ruling that the term “collapse,” as defined by a homeowners insurance policy, is unambiguous and that the policy in question did not provide coverage for the alleged “cracking” and/or “bulging” of the insureds’ foundation walls.  In Alexander v. Gen. Ins. Co. of … Continue Reading

Hurricane Sandy, Flood, and Sewer Backup: New Jersey Federal Court Confirms Anti-Concurrent Causation Bars Insured’s Claim

As we have written about before on this blog, the water damage caused by Hurricane Sandy in October 2012 gave rise to important questions concerning the applicability of so-called “anti-concurrent causation” clauses. Such was the case in the recently-decided matter of Carevel, LLC v. Aspen American Ins. Co., 2016 U.S. Dist. LEXIS 157919 (D.N.J. Nov. … Continue Reading

Ambiguity And Ensuing Loss: The Second Circuit Affirms The Southern District Of New York’s Holdings In a $675 Million Superstorm Sandy Insurance Coverage Dispute

In National Railroad Passenger Corp. v. Aspen Specialty Ins. Co., 2016 U.S. App. LEXIS 16074 (2d. Cir. Aug. 31, 2016), Amtrak sought the entire $675 million of available coverage from a number of its insurers for damages incurred as a result of Superstorm Sandy.  Most of Amtrak’s damages resulted from flooding of tunnels under the … Continue Reading

Is Anyone Home? Washington Supreme Court Interprets Two-Step Vacancy Endorsement

Disputes involving “vacancy” exclusions typically involve the appropriate definition of that word. We have previously written about such cases here and here. The recently-decided case of Lui v. Essex Ins. Co., 2016 Wash. LEXIS 692 (Wash. June 9, 2016) presents a somewhat different issue, namely, how soon after a vacancy occurs are a policy’s coverages … Continue Reading

New York’s Second Department Holds That Omission of Exclusion in Declination Letter Does Not Operate As Waiver

On April 6, 2016, New York’s Second Department issued a decision in Provencal, LLC v. Tower Insurance Company of New York, 2016 N.Y. App. LEXIS 2529 (Apr. 6, 2016) holding that an insurer does not waive application of an exclusion in an insurance policy if the insurer omits the language of the exclusion in the declination … Continue Reading

Recent Decision Finds No Business Income Coverage Where Flood Caused Order of Civil Authority

When Super Storm Sandy struck the Northeast on October 29, 2012, states, cities, municipalities and towns up and down the East Coast ordered hundreds of thousands of people to evacuate from their homes and businesses.  In the aftermath of those mandatory evacuations, I published an article in the April 2013 issue of DRI’s For The … Continue Reading

Mold Exclusion: Louisiana Federal Court Interprets Exclusion And Endorsement

Many insurance policies include exclusions that are modified by endorsement. An analysis of the specific language in both the exclusionary provision and the modifying endorsement are critical in determining whether a peril is excluded by the policy. Evonthe Hayes v. Southern Fidelity Insurance Company, 2014 U.S. Dist. LEXIS 14692 (E.D. La. October 15, 2014) involved … Continue Reading

Another State Weighs in on Pollution Exclusions in General Liability Policies

In May 2014, Nevada became the latest state to interpret the breadth and applicability of the pollution exclusion contained within a third-party general liability policy. Although many states have considered this question, those courts have reached diametrically opposite conclusions, leading to confusion and uncertainly, particularly with respect to states that have yet to address the … Continue Reading

When It Rains It Pours: The First Circuit Tackles a Conflux of the Rain Limitation, Flood Coverage, Surface Water Exclusion, and Efficient Proximate Cause

In Fidelity Co-Operative Bank v. Nova Cas. Co., 726 F.3d 31 (1st Cir. 2013), the First Circuit addressed what can happen when a variety of inter-related perils converge to create one loss under a policy with numerous amendatory endorsements that differ substantially from the typical commercial property policy. The insured in this case suffered extensive … Continue Reading

Connecticut Appellate Court Clarifies “Vacancy” Definition of Vandalism Exclusion

In New London County Mut. Ins. Co. v. Zachem, 145 Conn. App. 160 (2013), the Connecticut Appellate Court defined the term “vacant” in a vandalism exclusion to mean that a dwelling is “unoccupied,” and does not otherwise contain “items ordinarily associated with habitation,” such as furniture or personal property. The Appellate Court further applied its … Continue Reading

New Jersey Appellate Court Rejects Insured’s Attempt to Circumvent the Pollution Exclusion in Asbestos-Related Loss by Using the Vandalism Exception to the Exclusion

When faced with the impending application of an exclusion that negates any coverage for a claimed loss, an insured may sometimes resort to far-fetched or implausible arguments to contend that the exclusion does not apply, or that an exception to the exclusion has the effect of reviving coverage. The insured in Woodcliff Lake Board of … Continue Reading

Insurance Fraud Case: Second Circuit Addresses Adverse Inference Instruction, Restitution For Prior Payments

In insurance fraud cases involving actual or alleged destruction of evidence by the insured, an issue often arises regarding whether an adverse inference instruction is appropriate, and, if so, what form it should take. The Second Circuit recently approved a “light” form of adverse inference instruction that allowed the jury to make an adverse inference … Continue Reading

Causation Issue Involving Nominal Cause Addressed By First Circuit Opinion Under Massachusetts Law

In Stor/Gard, Inc. v. Strathmore Ins. Co., No. 12-1650, 2013 U.S. App. LEXIS 11015 (1st Cir. May 31, 2013), the First Circuit rejected the notion that a 2% contribution to a loss could be a “cause” of the loss. Defendant Strathmore Insurance Company (“Strathmore”) insured Plaintiff SGI, which owned property with self-storage warehouses, and Plaintiff … Continue Reading

Collapse and Ensuing Loss Clause Addressed By New York Trial Court

A New York trial court recently addressed the definition of “collapse” and the meaning of the ensuing loss clause in Copacabana Realty LLC v. Fireman’s Fund Insurance Company, No. 10-2919, 2013 NY Slip Op 30960(U) (NY Sup. Ct. Suffolk County Apr. 29, 2013), granting the defendant insurer’s motion for summary judgment on both issues and … Continue Reading

Florida Appellate Court Upholds “Other Structures” Policy Exclusions In Absence Of Conflict With Condominium Act

In Citizens Property Ins. Corp. v. River Manor Condominium Assoc., Inc., 2013 Fla. App. LEXIS 5729 (4th DCA April 10, 2013), the court primarily addressed a potential conflict between a policy exclusion and insurance coverage requirements of the Condominium Act, Fla. Stat. 718.111(11)(b). Ultimately, the court reversed the trial court’s summary judgment ruling in favor … Continue Reading

Law and Ordinance: California Appellate Court Determines Exclusion Plainly Applies to FEMA Regulation

Typical property policies include an exclusion for law and ordinance coverage, i.e., when the insured property suffers a loss requiring repair, the policy does not cover costs of repairs required to comply with building codes. The issue of law and ordinance coverage typically arises in older buildings that are not up to code at the time … Continue Reading
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