Last week I began a series of posts related to the complex area within insurance for boiler and machinery coverage. This post will continue the discussion about interesting areas of coverage within boiler and machinery policies. What does the term "hostile fire" mean in the context of boiler and machinery policies? A fire loss exclusion in a boiler and machinery policy could be construed to be referring only to a "hostile fire" since the boiler could not be operated or used without the "friendly fire" under it.1
If the boiler and machinery items insured have “friendly fire” within the system as part of its operation, then the “hostile fire” discussion within this case refers to something occurring, in my understanding, outside of the normal operation of the system. In the Nitrin case, the boiler and machinery insurance carrier was pointing the finger at the property fire insurance carrier for responsibility to cover the claimed damages. If the normal operation of the system containing “friendly fire” breaks down and causes damage, then the boiler and machinery insurance carrier’s reliance of the fire exclusion may be misplaced where no intervening “hostile fire” occurs.
It can be beneficial for policyholders to plead the origin of any fire if it is involved in the causal chain of events and to be aware of the particular wording of any fire loss exclusion within the boiler and machinery policy.
1 Nitrin, Inc. v. American Motorists Ins. Co., 236 N.E.2d 737 (Ill. App. 1968).