Insurance disputes often turn on small words that carry enormous consequences. Few words are as deceptively simple and as consequential as “fortuity.” It sounds abstract and academic until you realize it can determine whether a policyholder receives millions of dollars in coverage or nothing at all. The words “fortuitious” or “fortuity” are not even found in property insurance policies. Yet, a pending case now before the Arizona Supreme Court deserves the close attention of every policyholder and every property insurance claims professional because of these words.
The case arises from a commercial building insured under an all-risk policy. Years before the claim at issue, the building owner learned that a long-term tenant’s water-intensive operations were contributing to moisture intrusion and concrete deterioration. Engineers recommended repairs and also suggested additional preventative measures. Some repairs were made. Others were not. The tenant remained. Time passed. Then, during the relevant policy period, the owner discovered that the building’s structural integrity had been compromised. The loss was reported. The insurer denied coverage, arguing that the damage was not fortuitous because it was reasonably foreseeable and almost certain to occur.
The framing of that denial is where everything becomes dangerous for policyholders.
All risk insurance has never promised perfection or immunity from hindsight. It promises coverage for loss unless the loss is excluded or unless the loss was a “certainty” in the sense that insurance law understands that term. For decades, courts across the country have explained that fortuity focuses on what was known at the time the policy was issued. It does not ask whether engineers can later say the damage was inevitable. It asks whether the insured knew, with certainty, that the loss would occur during the policy period.
In this case, the trial court accepted the insurer’s argument and ruled there was no coverage because the loss was not fortuitous based on facts making the loss reasonably foreseeable and almost certain to occur if preventative steps were not taken. 1 That ruling effectively collapsed fortuity into a negligence and maintenance analysis. It treated risk management decisions as proof that insurance should never apply. If that approach stands, all-risk policies quietly become no-risk policies whenever a building has a history, a flaw, or a warning sign that the policyholder knows of and fails to address and take corrective action.
The Ninth Circuit recognized the magnitude of that trial court ruling. It did something rare and important by certifying the core issue to the Arizona Supreme Court. 2 The certified question reads as follows:
Is damage to property a ‘fortuitous’ loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?
That single question and its answer will shape the future of property insurance claims in Arizona. The answer will certainly have an impact beyond Arizona if the court rules in the insurer’s favor because other insurers will start making a similar argument in other states. If fortuity is defined by hindsight-driven inevitability, insurers will be able to deny coverage whenever they can find an expert willing to say the damage would have happened eventually. That logic does not just swallow fortuity. It swallows all risk coverage whole. Buildings age. Water intrudes. Materials fail. Owners make judgment calls every day about repairs, tenants, and budgets. Insurance exists precisely because those decisions involve uncertainty, not certainty.
On the other hand, if the Arizona Supreme Court reaffirms that fortuity turns on whether the insured knew the loss would occur during the policy period, the doctrine remains tethered to its proper role. Exclusions like wear and tear, deterioration, and settling still do their work. Known loss and loss in progress doctrines still bar coverage where appropriate. But fortuity does not become a blunt instrument that erases coverage before the policy language is ever applied.
For policyholders, the stakes are obvious. A ruling that equates foreseeability with non-fortuity would punish transparency, diligence, and risk assessment. It would reward ignorance and discourage investigation. For claims professionals, this decision will define how losses involving long-term conditions, gradual processes, and delayed discoveries are evaluated going forward. It will clarify whether fortuity is a narrow threshold inquiry or an all-purpose escape hatch.
Insurance is supposed to protect against risk, not against surprise alone. The Arizona Supreme Court can now say whether all risk policies still mean what policyholders reasonably believe they mean. Everyone who handles property claims should be paying attention to this outcome.
I noticed that Amy Samburg is on the briefing for the insurance company. She is a seasoned insurance defense appellate and trial lawyer. From prior legal battles with her, I know her sharp legal analysis, disciplined writing, and ability to frame complex insurance issues with clarity and precision. Those of us who have litigated against her know that she prepares relentlessly and argues forcefully but professionally. I am not surprised to see her pressing on this complex issue.
This is an important concept to property insurance. I suggest that readers of this blog take a few minutes to consider the following articles we have written on the topic:
Deconstructing the “All-Risk” Policy: What Does “All-Risk” Really Mean?
The Fortuity Doctrine: Deconstructing the All-Risk Policy
The Fortuity Doctrine, Part 2: Deconstructing the All-Risk Policy
The Fortuity Doctrine, Part 3: Deconstructing the All-Risk Policy
Lack of Fortuitous Event Sinks Insurance Claim
The Concept of Fortuity and The Wear and Tear Exclusion
Thought For The Day
“The essence of risk is uncertainty.”
— Frank H. Knight
1 Industrial Park Center v. Great Northern Ins. Co., No. 2:22-cv-01196, 2024 WL 3553113 (D. Ariz. July 26, 2024).
1 Industrial Park Center v. Great Northern Ins. Co., No. 24-4788, — F.4th —, 2025 WL 3716364 (9th Cir. Dec. 23, 2025).
