Tag archives: Exclusions

Asbestos exclusion upheld in US

An exclusion for claims ‘arising out of asbestos’ was upheld by the US Third Circuit because it is unambiguous and therefore enforceable. The Appeal Court overturned a $36 million judgment against the insurer, which is only part of the policyholder’s liability for $120 million worth of asbestos-related claims. The court did not accept the argument that the … Continue reading

Application of insolvency exclusion (UK)

Where a professional indemnity policy excluded claims ‘arising out of or related directly or indirectly to the insolvency of the insured’ the court absolved the insurer from liability in a claim by a financial management company that had lost money on a £200 000 investment when the issuer of a bond went insolvent. The court held … Continue reading

‘Arising out of or in connection with’ use of land in liability insurance exclusion

A New Zealand couple owned a farm in which they carried out farming activities and a landscaping business. They built and burned a fire heap on the property. Strong winds spread the embers and the fire spread rapidly onto nearby properties causing extensive damage. Their insurance policy excluded ‘legal liability arising out of or in … Continue reading

No cover for racing school accident even though exclusion not read by insured (US)

Where a motor policy excluded coverage ‘for any vehicle located inside a racing facility for the purpose of … or participating in any driving school, driver training or skills training’ the court refused the insured an indemnity to cover a crash at a motor racecourse skills-training event. The insured crashed while he was instructing a … Continue reading

Insurance exclusion for ‘that particular part’ on which ‘performing operations’ (US)

The insured subcontracted a builder to build 53 prefabricated modular units for its residential blindness rehabilitation facility. The insurer denied an indemnity for water damage under a partly completed roof saying that the applicable exclusion barred coverage for ‘that particular part’ of property on which the policyholder or its subcontractors ‘are performing operations’. The units … Continue reading

US court upholds Lloyd’s flood exclusion

A US court of appeals upheld the exclusion in a policy issued by Lloyd’s Underwriters for losses ‘caused directly or indirectly by flood’ in relation to a claim where a river basin marina lost five of its docks in a storm which generated strong winds and 18cm of rain causing the river to rise about … Continue reading

Asbestos exclusion upheld in US

An exclusion for claims ‘arising out of asbestos’ was upheld by a US appeal court because it is unambiguous and therefore enforceable. The appeal court overturned a $36 million judgment against the insurer, which is only part of the policyholder’s liability for $120 million worth of asbestos-related claims. The court did not accept the argument that the … Continue reading

Exclusion for medical services in a medical malpractice claim (US)

Over a 150 patients claimed damages against a hospital because of an outbreak of fungal meningitis and related infections which resulted from the patients receiving injections with contaminated substances. The court held that there was no claim under the insurer’s commercial package policy based on personal injury claims because the policies excluded bodily injury ‘due … Continue reading

Interpretation of exclusions

Traditionally, ambiguous exclusion clauses provide little or no protection because they will be interpreted narrowly and against the person who tried to exclude their liability (in Latin the contra proferentem rule). In the light of modern methods of interpretation it is doubtful that this principle of interpretation can be used in every case for anything … Continue reading

Cover for collapsed crane excluded by a contractor’s equipment exclusion (US)

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 … Continue reading

Mudslide is not an explosion (US)

An insured unsuccessfully contended that the destruction of a building during a mudslide was an explosion under the policy terms. Torrential rain in Boulder, Colorado in September 2013 triggered a mudslide that cascaded down a hill and destroyed the property, leading to a loss of $1.3 million. The policy excluded losses due to water-based causes, including … Continue reading

Directors and officers policy does not cover executive-induced decline of company (US)

A California company specialising in plumbing fixtures unsuccessfully sought cover under a directors and officers policy for a claim brought by three former directors based on the decline of the business because of the chief executive’s erratic behaviour. The court held that the so-called ‘insured-v-insured’ exclusion unambiguously bars coverage for a claim such as that … Continue reading
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