Major construction on a crowded urban lot almost inevitably causes issues with adjoining property owners. A recent New York decision confirms that when the earth moves, earth movement exclusions may preclude coverage. In Gogam v. Admiral Indemnity Co., 2026 WL 2595045 (N.Y. Sup. Ct. Aug. 21, 2026), the Supreme Court, New York County, granted the insurer’s motion to dismiss, holding that an insured’s claim for cracking and settlement damage caused by construction next door fell squarely within the policy’s earth movement exclusion.
The insured owned a commercial property whose west wall shared a foundation slab with, and immediately bordered, an adjacent building. Beginning in 2020, the neighboring building underwent an extensive renovation that included gutting its interior, adding two stories, and lowering its basement below the water table. Before construction began, engineers had warned that the basement work, underpinning, and dewatering would impact the insured’s premises. After construction started, the property sustained interior and exterior cracking and a partial ceiling collapse. No party disputed that the damage was caused by the neighboring building’s construction.
The insurer denied coverage based on the policy’s earth movement exclusion, which provided that the insurer “will not pay for loss or damage caused directly or indirectly by” earth movement, including “[e]arth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty.” Critically, the exclusion applied “regardless of whether any of the above … are naturally occurring or due to man-made or other artificial causes.”
The insured argued that its claim was meritorious and that coverage should apply, in part because the insurer had authorized and issued an initial payment before disclaiming. The court disagreed. Relying on the plain terms of the exclusion, the court held that the damage was caused directly or indirectly by earth movement and was therefore excluded. Both the insured’s and the insurer’s experts attributed the loss to some combination of vibration, excavation, underpinning, and dewatering associated with the adjacent construction. As the insurer’s expert put it, “[n]o matter which factors contributed, or in what proportion each factor was involved, they are all related to the construction work” next door. The court concluded it did not matter which mechanism predominated, because each was a form of excluded earth movement.
The court’s analysis rested on well-established New York authority. In Bentoria Holdings, Inc. v. Travelers Indemnity Co., 20 N.Y.3d 65 (2012), the Court of Appeals held that an earth movement exclusion with the same operative language — expressly reaching “man made or other artificial causes” — is unambiguous and excludes damage caused by “the intentional removal of earth by humans,” such as excavation. That holding closed the gap left by Pioneer Tower Owners Assn. v. State Farm Fire & Cas. Co., 12 N.Y.3d 302 (2009), in which the Court found a bare earth movement exclusion did not unambiguously apply to excavation. The Gogam court also relied on 3502 Partners LLC v. Great American Insurance Co. of New York, 204 A.D.3d 525 (1st Dep’t 2022), which applied Bentoria to dismiss a similar claim at the pleading stage and rejected the argument that a covered “vibrations” theory could avoid the exclusion, reasoning that “[e]ven if vibrations caused the damage, the excavation was still a contributing cause of the damage.”
Based on the court’s holding in Gogam, first-party property damage caused by excavation, underpinning, dewatering, or vibration from adjacent construction is precluded from coverage under an earth movement exclusion that expressly reaches man-made causes. The decision is a useful reminder for insurers of the importance of exclusion wording: the “naturally occurring or … man-made” qualifier, paired with “directly or indirectly” causation language, allows the exclusion to reach the entire loss even where a covered cause is alleged to have contributed. Insurers should also note that the court enforced the exclusion notwithstanding the insurer’s earlier payments, underscoring the value of a properly worded reservation of rights while a claim is investigated. Ultimately, Gogam confirms that a precisely worded earth movement exclusion — reaching man-made causes and expressly barring direct or indirect earth movement — remains a viable defense for first-party property insurers in New York.