In recent years, many courts have held that storm surge is a species of excluded flood loss; we reported on a New York example in July. This week, in Public Serv. Enter. Group, v. ACE Amer. Ins. Co., 2015 WL 1428370, Unpub. LEXIS 620 (N.J.Super., Mar. 23, 2015), a New Jersey trial court granted summary judgment to Public Service Electric & Gas (PSEG) and held that the flood sublimit did not apply to a claim for Superstorm Sandy loss from storm surge where the contracts of insurance specifically recited that coverage for a “named windstorm” – which was not subject to any sublimit – included “ensuing storm surge.”
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.
PSEG had $1 billion in layered property coverage from 11 different insurers, and it made claim for the loss. The policies had no sublimit for “named windstorms” in New Jersey, but there was a $250 million sublimit for loss occasioned by the peril of “flood” and a $50 million sublimit for flood loss to property “located in Flood Zones A & V.” The insurers took the position that PSEG’s recovery was capped at $50 million, and the utility brought suit. On Monday of this week, Judge Thomas Vena granted PSEG’s motion for summary judgment and held that the flood sublimits did not apply to its Superstorm Sandy claims. Read more ›
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).
Petrey was a wholesale distributor of goods supplied to convenience stores, one of which was a two ounce “energy shot” drink called “5-Hour Energy.” It hired salespeople for delivery routes, and each of them leased a Petrey storage unit. The salespeople ordered inventory from Petrey’s warehouse, and the insured then delivered the goods to the storage unit for distribution.
The policyholder made claim after the heating, ventilating, and air-conditioning (HVAC) systems in five townhouses at its Creek’s Edge at Stoney Point Townhomes complex in Richmond broke down due to off-gassing from the drywall. Its property insurance carrier, Nationwide Mutual, responded by filing a declaratory judgment action asking the court to hold that it had no obligation to cover the claims. Stony Point conceded that it had no coverage under the main body of the contract of insurance in the wake of Travco, but it contended that the damage to the HVAC units was covered by an Additional Coverage for “Equipment Breakdown.” This recited that Nationwide “will pay for loss caused by or resulting from an ‘accident’ to ‘covered equipment.’ “ The provision also afforded coverage for “the additional cost to repair or replace Covered Property because of contamination by a ‘hazardous substance.’ “ 