As a follow up to my two earlier posts on this topic, Water Damage Occurring Over Several Year Period Can Be “Occurrence” Covered Under Insurance Policy—Parts 1 and 2, Chubb had filed a motion for rehearing with the 7th Circuit Court of Appeals that had issued its opinion interpreting the issue under Wisconsin law. Recall this is the case where progressive water damage occurring over a sixteen year period was deemed a covered “occurrence” based on the language chosen by Chubb for its policy and Wisconsin’s “continuous trigger” theory.1
On January 15th, the Seventh Circuit denied Chubb’s request for a rehearing or rehearing before the full panel of judges on the Seventh Circuit. As such, the Court refused to disturb its ruling that Chubb is responsible to pay the policyholders’ claim for progressive water damage occurring over a sixteen year period. The Seventh Circuit did not have to give a detailed reason for its denial of Chubb’s request for rehearing. No judge requested a vote on the petition for rehearing en banc and all of the judges on the case with the ruling voted to deny Chubb’s petition for rehearing.
Chubb argued that after this opinion, Wisconsin insurance law is in “an extreme minority” when compared to other jurisdictions. The policyholders argued that the ruling is a limited Wisconsin state law issue and lacks any “national significance” required for a rehearing.
The case has gained attention from insurance industry groups and policyholder representatives. Whichever side of the fence you are on, the decision has wide reaching effects for insurers whose policies are worded with similar language to the Chubb policy involved in the case. Of course not every jurisdiction may have the “continuous trigger” theory so the law in the jurisdiction you are in would always need to be checked along with the policy language.