In October 2025, a Washington Appeals Court found that an insurance claim arising from the failure of a wall constructed by the insured was not “sudden and accidental” because the insured had knowledge in the months before the wall failed of the fact that the retaining walls were not built correctly and had a substantial risk of failure.

The walls constructed were “impaired property” according to an exclusion that barred coverage arising out of a defect, deficiency, inadequacy or dangerous condition” of the product or work of the insured. The impaired property exclusion contained an exception for the “loss of use of other property arising out of sudden and accidental physical injury” to the insured’s product or work after it had been put to its intended use.

The court held that, under Washington law, the phrase “sudden and accidental” in insurance contracts generally means “unexpected and unintended”. Under this inquiry, the court asked whether the insured “subjectively expected” that the wall would fail.

Prior to the event, three experts had pointed out defects in the way the wall was constructed which led a third-party purchaser to terminate its agreement to purchase the project and the insured had agreed to reduce the contract price for the work done. Thus, the insured was on notice of the issues with the wall’s construction, and the failure of the wall was not unexpected because an undisputed expert report found “a substantial risk of future wall failures”.

This is not a surprising decision on the facts, and a similar decision would be arrived at in South Africa. The word “accidental” in South African law bears a similar meaning, namely an unexpected or unintended event.

Bitco General Insurance Corporation v Union Ridge Ranch, LLC, case no 24-6473 in the US Court of Appeals for the Ninth Circuit