According to a recent decision by a New York Court of Appeals, coverage of excavation damage is shifted by the exclusion of land movement in politics. in 3502 Partners LLC v. Great American Insurance of New YorkCase No. 2021-03449 (NY App. 1st Dep’t Dep’t 21 April 2022), an insurer sued the insurer under a first-party policy, alleging in its complaint that its property was damaged as a direct result of excavation work on an adjacent plot .
Based on the allegations in the complaint, the insurance company filed an application with refusal, asserting that coverage is excluded due to the exclusion of land movement in the policy. The exclusion prevented coverage of “ground movement,” including “land sinking (other than stream collapse), elevation or transformation including soil conditions causing sedimentation, faulting, or other defects in foundations or other parts of the estate,” and its application. “Regardless of whether [the earth movement] caused by a natural or man-made act or caused by anything else.” In response to the insurance company’s request for refusal, the insured submitted an affidavit asserting that the damage to the property was also caused by “vibrations from construction work,” which is Covered cause of loss.
The court held that the claims of the insured placed the damage to his property within the exclusion of land movement. In doing so, the court dismissed the insured’s claim that the complaint should use the exception’s phrase “ground movement” to apply, arguing that the excavation, by definition, is the “deliberate removal of land by humans.” The court also ruled that even if the vibrations caused the damage, the excavation would still be a contributing cause of the damage, and the policy stated that there would be no coverage for loss or damage caused by the movement of the earth “regardless of any cause or other event contributing concurrently or in any sequence to the loss “. Given the general language of excluding land movement, the Court held that it unambiguously included damage to property caused by earthworks.
Based on the court’s decision 3502 PartnerDamage to property resulting from excavation work is excluded from coverage by excluding movement of the earth. If the exclusion also contains an asynchronous causal clause, coverage is excluded, even if the covered cause contributed to the loss.
About the authors