Tag archives: Exclusions

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

Wilful act and business activity exclusions applied to defamation claim

The wife in a couple who were both dentists posted a phony social media review about a competing dentist accusing him of being unprofessional and providing terrible care. When they were sued for defamation they tried to claim an indemnity under their personal homeowners’ insurance policy. The court refused to grant them the indemnity because … Continue reading

Is anti-competitive behaviour insurable?

The August 2016 first-of-its-kind judgment against South African Airways in favour of Nationwide Airlines, for damages arising from conduct that was held to be an anti-competitive exclusionary act preventing Nationwide from entering into or expanding within the travel market, raises the interesting question whether the loss is insurable by the company and the directors. SAA … Continue reading

Skydiving accident excluded

A US federal judge has held that the insurer of a New Jersey airport owed no coverage in an underlying lawsuit stemming from injuries suffered during a skydiving accident because of the policy exclusion for injuries arising out of any parachuting activities. The parachute jumping exclusions stipulated that coverage did not include bodily injury or … Continue reading

Suicide not covered despite brain disease

A USA court upheld a suicide exclusion in a policy and rejected arguments that it should not apply because the insured had mental health issues and showed post-mortem degenerative brain disease. The evidence revealed that he had planned his suicide and it was therefore a decision and not an insane impulse. The court said a … Continue reading

Exclusion for owned or occupied property upheld

A US New Mexico federal court upheld an exclusion for pollution cover which excluded damage to property that the insured owns, rents or occupies including sums paid for the repair, restoration or maintenance of the property and paid to prevent injury to third party property. The insured operated a ski resort under licence from the … Continue reading

Insurers can’t use sexual misconduct exception in Cosby defamation suits

A California court has ruled that Bill Cosby’s insurer cannot rely on a homeowner policy exclusion barring coverage for claims “arising out of” alleged sexual misconduct. Cosby was sued for defamation because he called the plaintiffs liars when they publicly alleged he had raped them. The court found the use of the phrase “arising out … Continue reading


An insurer was held liable under the liability section of a construction company’s insurance policy for a claim by 23 Texas government employees who required medical treatment due to exposure to toxic mould resulting from faulty construction of their new office building. It was held that the pollution and health hazard exclusion did not specifically … Continue reading

Work product exclusions defeats a claim

The United States coastguard sued Bollinger Shipyards for defective repairs to patrol boats that rendered them useless. The claim was $78 million. It was held that the insurers did not owe the shipyard an indemnity because the claim was excluded by a work product exclusion. The cover excluded “the failure of your products to meet any … Continue reading