A septic system back-up into a home can be a rotten situation for a homeowner, and depending on the extent of the back-up, can cause widespread damage throughout the home. When researching coverage for septic system back-ups I was surprised by the number of Florida cases addressing this very issue.

The initial cause of the septic system back-up will affect coverage analysis, but Florida courts seem to agree that if the septic system is wholly contained on the residence premises, then the policy affords coverage for back-ups into the home.

In each of the following cases the insurance carriers attempted to apply the “Water Backup Exclusion” to exclude coverage. The typical language found in an HO3 policy provides:

b. Water or water-borne material which backs up through sewers or drains or which over-flows or is discharged from a sump, sump pump or related equipment;

Florida’s Third District Court of Appeal addressed the back-up of waste water from a blocked pipe on the residence premises in Cheetham v. Southern Oak Insurance Company.1 While this case does not directly involve a septic system, the reasoning used by the court has been since cited in cases involving septic systems. The court found that “[b]ecause the claimed loss in this case was caused by the deterioration of a pipe within the plumbing system, which caused water or water-borne material emanating from the residence premises’ plumbing system to back up into the residence premises, we find the Cheethams’ loss is a covered loss under the policy.” The court reasoned:

Our interpretation of these provisions is consistent with the First District Court of Appeal’s interpretation of a virtually identical water damage exclusion in the policy reviewed in Old Dominion. In Old Dominion, the insured premises, a store within a mall, sustained water damage when a blockage in the main drain pipe that services the entire mall caused water back up into the store. The blockage occurred in the main drain pipe that led to the treatment plant, and which was located off the insured premises.

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After reviewing several out-of-state cases, the court found that ‘the general understanding in the case law is that a sewer or drain begins at the…property line.’

More recently, the court in Wohl Built, Inc. v. Maxum Indemnity Company,2 found coverage for the insured when an on-site septic system, which was wholly contained within the property and not attached to any municipal sewer system, flowed from the septic system into the insured property through showers and toilets. The carrier denied the insured’s claim relying on the same “water that backs up or overflows from a sewer, drain or sump” policy language. The court reasoned that it was undisputed that the septic tank was wholly contained within the property and found as a matter of law that “the Water Backup Exclusion does not apply to any damage resulting from a backup or overflow of water from [the insured’s] entirely on-site septic system.”

Most recently, in Cameron v. Scottsdale Insurance Company,3 the insureds challenged a denial of coverage from a backup and overflow of a drain. The Eleventh Circuit held that the Florida Third District Court of Appeal’s decision in Cheetham was “directly on point” and there were “no material differences between the facts of this case and Cheetham.” The Eleventh Circuit applied the Cheetham interpretation and concluded that the water backup exclusion did not apply. Pursuant to Cheetham, under Florida law, the water exclusionary policy applies “only to damage caused by water originating from somewhere other than the residence premises’ plumbing system.”

These cases seem to support a finding of coverage provided that the septic system or plumbing system is wholly contained on the residence premises. Hopefully these cases can assist homeowners trying to clean up a stinky situation.

*Disclaimer: How courts treat these policy provisions in other states outside of Florida has not been researched and this blog focuses exclusively on Florida law.
1 114 So.3d 257 (Fla. 3d DCA 2013).
2 2018 WL 5020194 (S.D. Fla. April 19, 2018).
3 No. 17-11907, 726 Fed.Appx. 757 (11th Cir. April 16, 2018).