When fortuity issues arise in insurance disputes, courts make a determination about the fortuity of the loss (as I wrote about in my previous post) and look to see how much control the insured had over the loss or damage. As one might expect, the general rule is the more control the insured has over the loss or damage, the less likely it is that a court will find coverage. In other words, if the insured makes every reasonable attempt to prevent a loss, but that loss ultimately still occurs, the loss is likely fortuitous.

For example, in David Danzeisen Realty Corp. v. Continental Ins. Co., 170 A.D. 2d 432, 565 N.Y.S. 2d 223 (1991), the roof of a building owned by the insured began to slide, and the insured to submitted a claim to its insurance company. The insurance company denied coverage, “contending that the loss was not fortuitous because it was caused by the plaintiff’s failure to adequately repair the roof following the fire [two years earlier].”

In determining whether this loss was fortuitous, the court first defined a fortuitous loss: “A fortuitous event is any occurrence or failure to occur which is…to a substantial extent beyond the control of either party.”

The insured did suffer roof damage due to a fire two years prior to this claim and hired a roofing company to repair the damage. As the court recognized,

“The [insured] did not have any expertise in this area, and therefore relied upon [the roofing company] to do whatever was necessary to properly complete the job….Thus, the loss was to a substantial extent beyond [the insured’s] control.”

Interestingly, the court held that even though the roof repairs were done under the insured’s watch, the fact that the insured hired a licensed professional to make the necessary repairs was enough to make the subsequent damage substantially beyond the insured’s control.

The insurance company also argued that the insured was negligent for failing to ensure that the proper repairs were made, but the court held, “[m]ere negligence of an insured is not a defense to coverage under an ‘all risk’ policy.” This goes to show that a loss can be fortuitous in some circumstances even when the insured was negligent.

Keep in mind that this case applied New York law and the law in other states may vary.