Often, your insurance policy will protect your property from loss by burglary, larceny, and other types of offenses. However, policies also contain numerous exclusions so it is important to read the small type in these policies because insurance companies often narrow these common-law offenses by placing certain requirements on the activity. For instance, the policy may require entry by the wrongdoer with force and violence greater than that employed in any breaking to effect an entry.1 This technicality could mean the difference between a covered loss vs. an out of pocket loss.
More common insurance clauses use language such as “forcible and violent entrance,” a “forcible break or entry,” the use of “violent and forcible means,” a “felonious entry by force,” a “felonious taking of property by violence,” or entry “by the use of tools or explosives,” and other such clauses.2 These are valid requirements in a policy, which is why it is so important to keep an eye out for them and understand what coverage you are paying for.
These types of exclusions mean that where entry is permitted by the insured or an agent of the insured, any theft that ensues would not be covered. One interesting case is that of Professional Metals Mfg. Company v. Maryland Casualty Company,3 where the burglars entered the premises of the insured’s property on the second floor through a hold caused by a fire in the insured’s floor. The thieves placed planks from the first floor (the planks didn’t belong to the insured) up to the second floor and stole goods. The court held it did not constitute forcible entry within the burglary policy because there was no entry by actual force and violence.4
Another exclusion may bar claims where there is no physical evidence to account for what happened to the property identified as lost or stolen. In the case of Blasiar Inc. v. Fireman’s Fund Insurance Company,5 the insured’s property insurance policy covered warehouse inventory but excluded “property missing but there is no physical evidence to show what happened to it, such as shortage disclosed on taking inventory.” There the insured discovered an inventory loss after (a) a burglary alarm was tripped with no sign of unlawful entry and (b) a few days later, there were signs of unlawful entry into an office adjoining the warehouse. Because the events didn’t show what happened to the missing inventory, the “mysterious disappearance” exclusion applied.6
I will continue to blog about the different exclusions in policies so policyholders know what to look for and ultimately what type of coverage they are paying for.
1 Couch on Insurance, Third Edition, Risks and Activities Covered By Insurance Policy § 151:44 Generally (citing Norman v. Banasik, 304 N.C. 341 (1981)).
2 Couch on Insurance, § 151:44.
3 Professional Metals Mfg. Co. v. Maryland Cas. Co., 31 N.J. Super. 172 (App. Div. 1954).
5 Blasiar, Inc. v. Freeman’s Fund Ins. Co., 76 Cal.4th 748, 757 (1999); California Practice Guide: Insurance Litigation, Exclusions From Coverage Ch. 6B-F.
6 Blasier, 76 Cal.4th at 757.