A New York Court of Appeals rejected a claim for collapse of a tower crane during Hurricane Sandy because the policy had an exclusion for ‘contracted tools, machinery, plant and equipment’. It rejected the insured’s submission that the crane was covered as a ‘temporary structure’.

Readers will remember the traumatic images of the boom of the 750 feet high crane collapsing in the high winds on October 29, 2012.

The court held that it was indeed a temporary structure but that the exclusion over-rode the basic cover. The crane was squarely within the definition of ‘machinery’.

The court rejected the plaintiff’s argument that the exclusion was so broad as to render coverage afforded under the temporary works provision of the policy illusory (sometimes called the exclusion swallowing the policy). The contractor’s tools exclusion did not defeat all of the coverage afforded under the policy’s temporary works provisions. That exclusion would not defeat coverage for things such as the cost of erecting scaffolding, for temporary buildings, and for other things such as formwork, falsework, shoring and fences.