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April 9, 2015  

 
 Q&A of the Week

No Coverage for Leaky Roof

A Florida subscriber recently asked the following question:

How are others handling this situation or how do you feel the policy should respond to this? We feel bad for our customer, who is the tenant.

The tenant, who was insured under a 1989 Businessowners policy, suffered damage to business personal property due to a roof leak from wear, tear, and deterioration. The form states that we do not owe for this loss and would owe only for the ensuing damage if is a specified peril, but water from a roof leak is not a specified peril.

This means our insured, through no fault of his own, is penalized from coverage under his own policy. He can certainly file a liability claim against the landlord's policy, but that can cause animosity.

Just wondered if you saw any other way to help our customer, other than pick a landlord who is accountable and maintains his building.


ANSWER: There is nothing on the policy that would help the insured. The lease should indicate who is responsible for maintaining the roof, but whether it is the landlord or the tenant, there is no way to insure against wear and tear or poor maintenance. If the landlord is responsible, it becomes a liability claim or legal issue.
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 What's New This Week in FC&S
E-Business Issues
E-businesses, as well as brick and mortar companies, face a barrage of traditional and Internet-specific exposures. Whether a company conducts business solely online or maintains only an informational Web site about its products or services, both are open to exposures that are associated with e-business. Insurance professionals need to be aware of growing problems between traditional coverage and the emerging exposures resulting from doing business via the Internet. Insurance professionals should review their clients' needs in order to detect and fill the gaps in coverage their clients may face in the cyberworld. Read More
 
 Litigation Watch
Smoke from Fire Not a Pollutant

This appeal arises from an action filed by the plaintiffs seeking to recover under the landlord's commercial general liability insurance policy for alleged injuries that occurred following a fire in the apartment complex where the plaintiffs lived. This case is Hobson v. Indian Harbor Ins. Co., Docket No. 316714, 2015 WL 1069242 (Mich. App. March 10, 2015).

The apartment building in which the Hobsons lived was insured under a CGL form that contained a total pollution exclusion. The original complaint filed by the Hobsons averred that one of the landlord's employees set a fire due to negligence and this fire injured the Hobsons and caused them damage. When the insurer of the building denied coverage, the plaintiffs then filed a lawsuit against the insurer.

The insurer said that the alleged injuries suffered by the Hobsons included smoke inhalation, and the total pollution exclusion barred coverage. The Hobsons countered that the pollution exclusion did not bar coverage since the exclusion clearly contemplates pollution as a substance that was confined and then released, something distinctively apart and different from a fire—a fire that in this instance was caused by negligence on the part of an insured, which then generated combustion and its natural by-products.

The insurer filed a motion for summary judgment and the trial court denied the motion. This appeal followed.
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 FC&S Ask the Experts
Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you?

Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials).

Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update.

Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by clicking here.
 
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 Contact Us
As always, your comments and questions are welcome.

Contact us at:
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The Zalma Insurance Claims Library
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Construction Defects Coverage Guide
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FC&S Team
Kelly Maheu, J.D.
Publisher
  Diane W. Richardson, CPCU
Consulting Editor
Christine G. Barlow, CPCU
Managing Editor, FC&S
  Diana B. Reitz, CPCU, AAI
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David D. Thamann, J.D., CPCU, ARM
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  Emily Brunner
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  Donna Cozatchy
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Barry Zalma, Esq., CFE
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