Feenix Parkside LLC owed a commercial building that incurred a partial collapse to their ceiling. When Feenix sought coverage for the collapse, the insurer—Berkley North Pacific—denied coverage for the loss. When Feenix reported the loss, they stated the collapse was due to decay, which was a gradual decline in strength and soundness.
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In March of 2017, I wrote a blog post about the crumbling foundations in Connecticut due to a concrete company, J.J. Mottes & Company, using concrete that contained pyrrhotite, that cause the concrete to lose integrity and collapse. Many insurance companies have been denying these claims for various reasons. One insured, Lawrence and Karen Cockill, sought to have their claim against Nationwide covered by arguing that the structural integrity of the concrete was diminished due to a “chemical reaction.”1
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Most property insurance policies provide additional coverage for direct physical loss of or damage to covered property caused by or resulting from an “abrupt collapse.”1 In Hoban v. Nova Casualty Company,2 a California federal district court recently addressed the meaning of the phrase “abrupt collapse,” which the commercial insurance policy at issue defined as “an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its intended purpose.”3
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At least one Michigan court has ruled that even when the execute general adjuster calls a building’s damage a collapse and labels it as a “cave in,” the denial will stand where the policy language supports an exclusion.1 This case arises out damages that occurred to a large commercial shop that repairs commercial trucks. There was a failure of the trusses and the roof began to sag, causing one of the walls to bulge outward due to the sudden pressure. Following the policy’s duty to mitigate the loss, the insured retained a company to install temporary shoring to support the roof and prevent further damage.
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Recognizing the public policy implications of an unsettled, recurring coverage issue involving crumbling concrete foundations in thousands of Connecticut homes, U.S. District Court Judge Stefan Underhill recently certified the following insurance coverage question to the Supreme Court of Connecticut:

What constitutes a “substantial impairment of structural integrity” for purposes of applying the “collapse” provision of this homeowners’ insurance policy?1
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Insurance policies are all different. Some policies include a definition of the word “collapse” and some do not. The Kentucky Supreme Court in Thiele v. Kentucky Growers Ins. Co., 2017 WL 2598494 (Ky. June 15, 2017), recently addressed whether termite infestation and damage which caused substantial damage was covered under the policy’s collapse provision.
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A recent case filed in the Western District of Texas highlights the importance of retaining experts to assist in evaluating the cause of loss early in the claim process. In White Lodging Services Corporation et al v. Liberty Mutual Fire Insurance Company,1 a hotel development and management company filed suit against Liberty Mutual over a collapse claim that arose during the construction of a hotel. The policyholder had a builders’ risk insurance policy issued by Liberty Mutual.
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Recently, Connecticut has had an increase in insurance claims for crumbling foundations due to faulty foundations poured in the 1980s and 1990s. Some foundations poured during this time frame contained a mineral, pyrrhotite, which can cause cracking when it reacts with oxygen and water. It is estimated nearly 20,000 foundations poured contain the mineral.
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