A Pennsylvania court held that the insurer was not liable because of misrepresentation for a portion of a $227 million settlement by a building owner arising from a building collapse that took seven lives and injured 12 people.

The event happened as a result of an uncontrolled collapse of a four-storey building which was being demolished causing it to fall on an adjacent store where the victims were located.

The demolition contractor involved misrepresented that he had documented the condition of nearby structures before undertaking the demolition work, which he knew to be a lie. He similarly lied when claiming he had a safety program in place.

The court found that the policy was invalid from the beginning because of the fraudulent misrepresentation.

The demolition contractor is serving a 15 to 30 year prison sentence because of the incident.

[The case is Berkley Assurance Co v Campbell et al]