In October 2025, a Connecticut Federal Court ruled that the insurer did not owe coverage for a property owner’s claim over a burst water pipe that resulted in a sudden settling of a commercial building making it unsafe for tenants. The court found that the policy’s earth movement and settling exclusion applied. According to the exclusion in a commercial general liability and commercial property policy, the property was covered but cover was excluded in the event of “earth sinking (other than sinkhole collapse), rising, or shifting including soil conditions which caused settling, cracking or other disarrangement of foundations or other part of the property. Soil conditions include contractions, expansion, freezing, thawing, erosion, improperly compacted soil, and the action of water under the ground surface … We will not pay for loss or damage caused by or resulting from … settling, cracking, shrinking or expansion.”
The sudden and catastrophic break in a water line caused hundreds, if not thousands, of gallons of water to disperse in the basement around the foundation resulting in a sudden settling of a main portion of the building. Expert witnesses described the cause of the event as settlement “due to the consolidation of soils under the brick pier”. There was no genuine dispute of fact that the cause of the damage to the building was soil consolidation. The court found that soil consolidation fitted within the categories referred to in the exclusion and that the damage was caused by or resulted from “settling, cracking, shrinking or expansion”. The exclusions applied “regardless of any other cause or event that contributes concurrently or in any sequence to the loss” so that the fact that the soil consolidation was caused by the sudden and catastrophic break in a waterline did not mean the exclusion did not operate.
It seems unlikely that, faced with similar facts and wording, a South African court would find that the event in question, namely soil consolidation by a massive flood of water was the same thing as “settling” or “earth sinking” when read in the context.