As the United States battle vs. COVID-19 rages on, the battle within the (albeit virtual) court rooms are just starting to take off. Courts across the country are faced with the ultimate question: whether the widespread presence of the COVID-19 virus and resulting governmental closure orders constitute a fortuitous loss causing direct physical loss to insured property owners’ properties.
Continue Reading Ambiguities in Civil Authority Insurance Coverage for COVID-19 Business Losses: “Prohibiting,” “Preventing,” “Denying” – What is the Difference?

Abbott and Costello’s performance of the now classic “Who’s on first?” baseball sketch remains comedy gold.1 In addition to being outrageously hilarious, this comedy sketch highlights the significance of language and how specific words can be misconstrued. The ambiguity of words becomes more significant than baseball positions when applying the legal effect of those words, especially as applied to a property insurance policy, which may mean hundreds of thousands of dollars or even millions.
Continue Reading Who’s On First? Discerning Ambiguity in Insurance Policy Language

Ejusdem generis is a Latin phrase that roughly translates as “of the same kind, class, or nature.” Its use is similar to that of noscitur a sociis,1 in that it usually involves a list of terms, but in this case one that ends in a catch-all category. Whether a particular object or event not specifically referenced in that list is subject to the exclusionary function of the listing depends on its similarity to the other items in the listing.2
Continue Reading What Is Ejusdem Generis and How Can it Help Clarify Ambiguous Policy Language If My Insurer Denies Coverage?

Generally, insurance policies in Texas are construed according to the same rules that govern the construction of contracts.1 Insurance policies must be interpreted by reading all sections of the document together.2 This stems from the primary concern of the courts—to enforce the parties’ expressed intent.3 “No one phrase, sentence, or section [of the policy] should be isolated from its setting and considered apart from the other provisions.”4 If part of a policy was read separately from the rest of the document, it would defeat the parties’ intent by excluding the other provisions.
Continue Reading Ambiguity in Texas Insurance Policies

The loss of market exclusion excludes from coverage any lost profits due to the business’s market disappearing. The loss of market could be due to economic decline, competition, or shifts in demand attributable to a dramatic occurrence. The question, as usual, is whether that exclusion applies to the claims of lost profit by policyholders that follow a covered peril.
Continue Reading Understand Business Interruption—Do Not Let the Insurance Company Deny Your Income Claim on Bogus Loss of Market Exclusions

Many of the homeowner policies we review exclude water damage resulting from, “continuous or repeated seepage or leakage of water or stream, or the presence of condensation of humidity, moisture or vapor which occurs over a period of weeks, months or years.” Courts have interpreted this clause to exclude water damage that occurs over 14 days. But what happens when you have a situation where there is significant water damage caused in the first thirteen days? Aren’t coverage clauses interpreted broadly so as to afford the greatest protection to the insured, while exclusion clauses interpreted narrowly?
Continue Reading The “Continuous or Repeated Seepage or Leakage of Water” Exclusion

Our client owns a large food market. Last summer, it burned down. The client submitted a claim under his business insurance policy from Farmers. The insurance policy included several different types of coverage, such as Business Property, Business Income, Extra Expense, and more. The insured had insufficient insurance limits under his Business Property to replace everything needed to reopen the market. Thus, he sought coverage for those items under Extra Expense coverage. By the plain and clear terms of the policy, these items were also covered under Extra Expense. But Farmers found an excuse to wrongfully deny the claim in a textbook example of how not to interpret and apply insurance policies in California.
Continue Reading Can Business Losses Be Covered Under Multiple Parts of Your Policy?