In part 2 of this series, I reviewed a New York trial court opinion in a case involving delay in completion coverage under a builders risk policy where damage was sustained during Sandy.1 The policyholder/developer sustained significant property and delay in completion loss from Hurricane Sandy. The court held that the policyholder was entitled to recover the total of $5 million for flood damages, physical damages, and the economic delay in completion losses sustained since they stemmed from the flood. The case was one of first impression in New York.

Last week, the policyholder/developer made it clear they intend to challenge the trial court’s ruling by filing a notice of appeal. In its notice of appeal, the policyholder argued that the trial court improperly held that the $7 million cap for delay in completion losses was subject to the $5 million limit for flood losses, “notwithstanding the stand-alone and self-contained delay in completion coverage endorsement’s own insuring agreement, limit, sub-limits (not including flood), definitions, terms and conditions.”2

The trial court determined in its ruling that the policy’s definition of flood losses included all losses; not just physical property damage.

Since this issue of first impression in New York will be an important decision, we will monitor this appellate case and will update as it progresses through to an opinion from the appellate court.

1 El-Ad 250 West, LLC v. Zurich American Insurance Co., 2014 WL 2931058 (NY Sup. Crt. June 27, 2014).
2 Bibeka Shrestha, "NY Developer Appeals Sandy Flood Limit Ruling" Law360, July 25, 2014.