Effective in 2005, Florida statutes defined “sinkhole loss” to mean “structural damage to the building, including the foundation, caused by sinkhole activity,” and they left the all-important term “structural damage” undefined. Homeowner’s policies issued in the state employed that formulation until May 17, 2011, when Florida adopted a much narrower five-part definition of structural damage that applied to policies affording coverage for sinkhole loss, and many courts construing the 2005 language held that the term “structural damage” meant nothing more than “damage to the structure.” Several weeks ago in Hegel v. First Liberty Ins. Corp., 778 F.3d 1214 (11th Cir., Feb. 27, 2015), a unanimous Eleventh Circuit panel held: (1) that defining structural damage to mean any “damage to the structure” was “facially unreasonable” and “untenable;” and (2) that the term was properly understood to mean “damage that impairs the structural integrity of the building.” It also refused, however, to look to the narrow 2011 formulation when dealing with a policy and a loss that preceded its effective date.
The Hegels owned a home in Spring Hills, Florida, and they made an insurance claim after discovering damage to the walls and floors on March 1, 2011. Their homeowner’s carrier, First Liberty, denied the claim after its engineering expert concluded that the damage could be attributable to differential settlement and ordinary concrete shrinkage as opposed to sinkhole activity and that, in any case, it did not rise to the level of structural damage as defined in the 2011 statute. The Hegels then secured several engineers of their own, who concluded that the home had suffered “widespread minor cracking” as a result of sinkholes and recommended $145,775 in subsurface grouting and $20,743.17 in cosmetic damage repairs. Read more ›
The insured was a law firm with offices on John Street in lower Manhattan. On October 28, 2012, the Mayor of New York City issued an executive order evacuating all homes and business located in the area. Superstorm Sandy made landfall the next day, and parts of lower Manhattan – though not the area around the policyholder’s offices – quickly experienced “never-before-seen flood levels.” On October 31st, a second executive order continued the evacuation and directed that buildings could only be reoccupied after being inspected and declared safe; 14 more orders were subsequently issued extending those restrictions. The law firm’s offices were ultimately declared available for occupancy on Christmas Eve, and the policyholder moved back in on January 4, 2013.
Eight large PSEG generating stations and a number of smaller distribution facilities were damaged when Superstorm Sandy came ashore in New Jersey on October 29, 2012. The utility’s current estimate of the loss exceeds $500 million. It was undisputed that a storm surge – which the court described as “a hurricane-generated inundation of water” – of “record-breaking height” caused the lion’s share of the damage.
The insured operated the Amish Connection Store in Crossroads Shopping Mall in Waterloo, Iowa. Rooftop drains discharged into a 4” cast-iron drainpipe that ran above the store’s ceiling tiles and then down the back wall of the space and into a storm sewer. The pipe was leaky and extensively-corroded, and it burst during a rainstorm on June 14, 2010, flooding the store and causing substantial damage to the policyholder’s inventory, office supplies, and records.
On February 6th, an intermediate level California appellate court held that a product contamination policy only covered contamination that occurs during or after manufacturing operations by the insured, meaning that there was no coverage where the policyholder’s product was found to be adulterated because it used an ingredient that had been contaminated by a third-party supplier. The decision is 
The insured was Broome County, the owner of a building in a government complex. During the construction of a parking garage below the structure, silica dust migrated up an elevator shaft and disbursed throughout all floors of the building. It was undisputed that inadequate dust barriers were what allowed the silica to infiltrate the shaft – it was “a flawed process on the part of the contractors that led to the loss at issue.” Broome County made claim for the resulting property damage, but its insurer, Travelers Indemnity, denied the claim, invoking the two exclusions discussed above.
The insureds, Frederick and Mary Platek, owned a home in Hamberg, New York. On September 7, 2010, a subsurface water main abutting their property ruptured, flooding the house’s finished basement and causing $110,000 in damages. The Platek’s insurance claim was denied by Allstate, their homeowner’s insurer, because the policy contained an exclusion reciting that Allstate “does not cover loss to the property . . . consisting of or caused by . . . 4. Water . . . on or below the surface of the ground, regardless of its source[, including] water . . . which exerts pressure on, or flows, seeps or leaks through any part of the residents premises.”
In 2005, Kasey McDermott purchased a home in Bay City, Michigan and secured homeowner’s coverage from Nationwide. Five years later in 2010, her then-husband Brien Matthews became a licensed medical marijuana patient and caregiver pursuant to Michigan law, and he set up a marijuana growing and processing operation in two rooms in the basement. The area was previously used only for storage and for the couple’s washer and dryer. By January of 2012, Matthews was servicing the needs of four patients, including himself.
Earlier this month a unanimous Florida appellate court joined a number of other states that have held that an all-risk policy exclusion for vandalism and malicious mischief operates to bar coverage for an arson loss. The opinion can be found at 
The case arose after Tri-Union Seafoods initiated a recall in response to the U.S. Food and Drug Administration (FDA) warning about potential contamination. The policyholder’s claim was denied by its product contamination carrier, Starr Surplus Lines, and Tri-Union then filed suit in federal court in California, where it was headquartered and incorporated. Starr’s response was a motion to dismiss based on the contract of insurance’s forum selection clause and/or to transfer to New York pursuant to 28 U.S.C. § 1404(a).