Tag Archives: Physical Damage

Case Highlights How Writing and Interpreting Policies Can Be Challenging in Today’s Technological World

In the recent case of Rainforest Chocolate, LLC v. Sentinel Insurance Company, Ltd.,1 the Supreme Court of Vermont found coverage for Rainforest where Sentinel’s “false pretense” exclusion turned out to be ambiguous as there were at least two reasonable interpretations of what constituted “physical loss or physical damages.”2… Continue Reading

Cosmetic and Functional Damage – An Academic Discussion by Neil Hall

Insurance companies have turned the property insurance world upside down by denying claims based on engineers who claim that no "functional damage" occurred and only "cosmetic damage" was sustained at the insured property. Most of us in the property insurance claims business have been taught that any "physical damage" is covered by a property insurance … Continue Reading

Poor Air Quality Can Be Physical Damage

I’ve lived all over the country and prior to making my way to the East coast, I was lucky enough to live in the Rogue Valley in Southern Oregon, home of Harry and Davids, Jackson and Perkins, and—for you craft beer aficionados—Rogue Brewery. One of my favorite things in the Rogue Valley is the Shakespeare … Continue Reading

A Hail Dented Roof is Covered Direct Physical Damage and Loss

Only insurance company claims managers and their paid for lawyers could argue that a hail dented roof is not a covered loss under a property insurance policy which specifically covers hail damage. A federal appellate court decision issued last week1 helps put an end to these crazy attempts by insurance company lawyers that argue virtually anything … Continue Reading

Important Decision in Favor of Policyholders on Matching Issue

One area of dispute in property insurance claims involving hail or storm damage is how much needs to be replaced. When part of a building’s roof or siding is damaged as a result of a storm, sometimes the replacement material is no longer available. The issue becomes does the entire roof or siding have to … Continue Reading

Federal Court Expands “Direct Physical Loss” Definition to Benefit of Insureds

For coverage to be afforded under insurance policies there is a requirement that the insured property suffer a direct physical loss from a covered cause of loss. This often leads to disputes and litigation concerning whether property suffered a physical loss. Insurance carriers argue that a physical change in the insured property must occur before … Continue Reading

Cosmetic Damage is Physical Damage

Property insurance policies cover physical damage to property. Cosmetic damage has traditionally been paid if the damage is greater than the deductible. Lately, some ingenious insurance company lawyers are wrongfully arguing that their stingy insurance company claims managers are correctly not paying for cosmetic damage.… Continue Reading

Coverage for “Direct Physical Loss or Damage” Under a Policy Does Not Include Cost to Re-Design or Modify a Golf Hole To Restore its Difficulty

While a majority of property insurance claims involve homeowners or commercial property owners whose buildings are damaged by hurricanes, floods or windstorms, it is not unheard of for a golf course to sustain damages as result of these types of perils. This subject matter is of particular interest to me because of my golf background. … Continue Reading

What Is Direct Physical Loss That Results From A Covered Peril?

I find it amazing in first-party property insurance that even after one has handled thousands of claims, new issues surface involving the same policy language dealt with over and over again. When such issues present themselves, the cynic may think: is the proponent of this argument clueless? The pessimist may wonder: have I missed something … Continue Reading

Industry Cannot Keep Up With Cyber Perils – Understanding Business Interruption Claims

“In this business it takes time to be really good – and by that time, you are obsolete” – Cher A recent article in the Insurance Journal magazine, “Industry Faces Cyber Risks in Shift from Tangible to Intangible Property,” highlights the urgent need for new underwriting products and guidelines to keep up with the constantly evolving … Continue Reading

Basic Thresholds to Coverage: Deconstructing the All-Risk Policy

After spending the past several weeks looking at common exclusions to the all-risk policy, this week’s blog will focus on more basic requirements that must be met in order for coverage to exist. Some will seem very straightforward, but others actually raise interesting legal issues when the right circumstances arise.… Continue Reading

The “Physical Damage” Requirement – An Archaic Concept in Today’s World – Understanding Business Interruption Claims, Part 57

Coverage that excludes electronic data serves very little purpose in today’s business world. Many businesses have abandoned physical storefronts and the familiarity of face-to-face transactions and operate exclusively in the cyber world. Even businesses that operate out of physical buildings or structures no longer store information in filing cabinets, but in servers and electronic files … Continue Reading

The “Loss” or “Damage” Coverage Requirements – A Business Interruption Afterword – Understanding Business Interruption Claims, Part 31

Earlier this week, Chip Merlin posted Does an Insurance Policy Cover only “Loss” or “Damage” to Property? regarding the different interpretations of the proverbial “loss” or “damage” provision in property insurance policies, specifically as applied in anticoncurrent causation analyses.… Continue Reading

“Physical Damage” as Loss of Function, Value or Use: Perhaps The Reasonable Expectations Doctrine is Not So Dead

Yesterday’s post, "A Law Professor Asks: Is The Reasonable Expectations Doctrine Dead?," may have reached a conclusion too quickly. A recent article in the American Bar Association‘s journal, Coverage, from the Committee on Insurance Coverage Litigation has an excellent article suggesting that the reasonable expectations doctrine still has life.… Continue Reading

Cosmetic Damage is “Physical Damage” and Recoverable Under a Property Insurance Policy

Yesterday’s post, Physical Damage is Needed to Collect for Loss of Warranty, may lead some to think that property insurance policies require “structural” or a “functional” destruction before coverage is not afforded. This simply is not true. Alterations to the physical appearance of a structure or personal property are covered so long as the cause … Continue Reading

“Physical Direct Loss” Caselaw and TWIA’s Roofing Memo

For those of you that read something and you think it is dead wrong, do your eyes squint and head start shaking? Mine did when I first read the internal TWIA roofing memo. As I read it, I was thinking: "Does the TWIA claims executive who wrote this not understand the basic insurance principle of what … Continue Reading